Laborers General President Arthur A.Coia
was cleared by the Independent Hearing Officer (IHO) Peter F.
Vaira of multiple charges of associating with organized crime
figures and knowingly permitting such individuals to influence
the activities of the union and its members.

After hearing testimony over the course of
ten weeks and considering over 500 exhibits, Hearing Officer Vaira,
a former United States Attorney and Chair of the Presidents Commission
on Organized Crime, found that allegations of organized crime
influence over Mr. Coia "simply disintegrated."

A $100,000 fine was assessed against Mr.
Coia for "a definite conflict of interest and an appearance
of impropriety"arising out of a joint venture with a LIUNA
car leasing vendor prior to the time that he became General President.
Related to this charge, Mr. Vaira added that he found that "no
union funds were involved" in the dealings and "there
were no kickbacks or payments, nor any direct effect on the union."

Coia was charged with 16 charges, arising
out of five separate subject areas:

1) Coia's knowing association with a Member
of La Cosa Nostra ("LCN") New England Crime Family

2) Coia's role in the Trusteeship of Local
66

3) Coia's role in the International Union's
Investigation of Ronald Fino's Allegations

4) Coia's appointment of John Serpico as
chairman of the GEB Hearings Panel, and

5) Coia's dealings with Viking Oldsmobile,
a union vendor

Summary of the Decisions Relating to These
Charges

1) New England Crime Family

The charges alleged that Mr. Coia associated
with Raymond Patriarca, Jr., once the head of the New England
organized crime family. In support of this charge, the GEB Attorney
relied on the testimony of two federally protected witnesses.

IHO Vaira found that the allegations of these
witnesses "disintegrated once both witnesses appeared
on the witness stand." He also found their testimony to be
contradicted by testimony and evidence from FBI surveillance records,
the Rhode Island State Police, and former police officials in
Rhode Island who had conducted extensive surveillance of Mr. Patriarca.
Mr. Vaira concluded that no improper relationship existed between
Mr. Coia a and Mr. Patriarca.

2) Local Union 66, Long Island

These charges relate to Mr. Coia's actions
and failure to act in allowing officers of Local 66, who were
influenced and controlled by the LCN, to remain in power and thereby
allowed the LCN to continue its control and influence over Local
66. Coia served as Hearing Officer in an emergency trusteeship,
prior to becoming General President.

The charges were dismissed as not being proven.
The IHO ruled that Mr. Coia's authority was limited, that constitutional
authority was placed with the General President, that Mr. Coia
brought his concerns to the attention of the General President
and the Regional Manager, and that Mr. Coia fulfilled his fiduciary
and constitutional responsibilities.

3) Investigation of Ron Fino's allegations

These charges concern Arthur Coia's approval
of expenditures of funds to attack the credibility of Ron Fino
regarding claims he had made of mob influence in LIUNA.

The IHO found the charges not proved. Mr.
Coia was General Secretary-Treasurer at the time that two investigations
were made regarding Ron Fino, who was an International Representative
of the Union and Business Manager of Local 210, Buffalo, New York.
Fino had charged that the International Union was under the influence
of the LCN at the highest levels.

One investigation was directed at reviewing
the substance of Fino's allegations, undertaken by the office
of the LIUNA General Counsel through David Elbaor, attorney with
the firm of Connerton, Ray and Simon. The IHO found Elbaor well
qualified to conduct this investigation and found that the investigation
was conducted properly and in good faith.

The other investigation, aimed at uncovering
evidence to attack Fino's credibility, was conducted by outside
counsel, Anthony Traini, an experienced criminal defense attorney.
The IHO found that Traini's investigation was properly undertaken
in the event that the Union eventually might need to defend a
criminal or civil RICO case. In addition, the IHO found that Mr.
Coia "fully satisfied" his fiduciary duties, acting
in accordance with his powers and responsibilities under federal
law and the LIUNA Constitution.

4) Activity of Mr. Coia in appointing John
Serpico of the GEB Hearing Panel

The GEB Attorney charged that the Serpico
appointment was improper because Arthur Coia knew Serpico was
"an instrument of organized crime influence over LIUNA."
These charges were dismissed as not proved.

The IHO found that Coia's appointment of
Serpico to serve as Hearing Officer was made for the legitimate
purpose of bringing about John Serpico's resignation from the
Union, and that Mr. Coia's ability to achieve that result in other
ways was limited, if non-existent. He also noted that even after
implementation of the LIUNA Ethics and Disciplinary Procedure,
removing Serpico was "a difficult endeavor."

5) Viking Oldsmobile

Three charges were reviewed by the IHO as
a continuing, single transaction.

One involves a claim that Mr. Coia obstructed
an investigation by the GEB Attorney and the Inspector General
by giving false or misleading deposition testimony. That charge
was dismissed as not proved and the IHO specifically found that it has not been
established that Mr. Coia attempted to mislead the investigation.

In the second charge, the GEB Attorney alleged
that Coia, while General Secretary-Treasurer, had violated the
LIUNA Ethical Practices Code for purchasing a 1991 Ferrari F40
automobile with Viking Oldsmobile, a union vendor. The IHO found
that the arrangements provided Coia with "favorable terms
and ...the opportunity to make a large profit," although
he also found that there were "no kickbacks or payments,"
and no use of union funds. The IHO imposed a fine of $100,000,
payable over two years, as a "penalty commensurate with the
benefits improperly obtained."

The third claim, relating to federal luxury
tax on the Ferrari transaction, was dismissed as beyond the scope
of the IHO's jurisdiction.

This Order and Memorandum addresses the disciplinary
charges of November 6, 1997, as amended on March 23 and April
8, 1998, filed by the Laborers' International Union of North America
("LIUNA" or "International Union") General
Executive Board Attorney ("GEB Attorney") against Arthur
A. Coia ("Coia" or "Respondent Coia"), the
International General President of LIUNA.

The Independent Hearing Officer ("IHO")
held a hearing which began on April 14, 1998 and ended on June
23, 1998. There were 22 hearing days. The transcripts from the
hearing total over 5500 pages, and over 500 exhibits were submitted
into evidence. Both the GEB Attorney and counsel for Coia submitted
post-hearing briefs on September 25, 1998 and post-hearing responsive
briefs on November 24, 1998.

Coia has been charged with sixteen charges
arising out of five separate subject categories which may be described
as follows: Coia's Knowing Association with a Member of La Cosa
Nostra's ("LCN") New England Crime Family; Coia's Role
in the Trusteeship of Local 66; Coia's Role in the International
Union's Investigation of Ronald Fino's Allegations; Coia's

1

Appointment of John Serpico as Chairman of
the GEB Hearings Panel; and Coia's Dealings with Viking Oldsmobile.

The incidents in question span the time period
from 1981 to the present and involve periods of Coia's career
from his early involvement in LIUNA to his ascent to the offices
of International General Secretary-Treasurer and International
General President.

In this matter, the GEB Attorney has presented
much evidence which is far outside the scope of the charges. The
IHO has dealt with these occasions as they arose and has made
no blanket prohibitions.

General Legal Standards

The following standards apply to the charges.

Barred Conduct

Pursuant to the LIUNA Ethics and Disciplinary
Procedures ("EDP") and the LIUNA Ethical Practices Code
("EPC"), union officers are prohibited from engaging
in "barred conduct," which is defined to include --

a) committing any act of racketeering, as
defined in 18 U.S.C. ?1961(1);

b) knowingly associating with any member
or associate of the organized crime syndicate known as La Cosa
Nostra (LCN);

c) knowingly permitting any member or associate
of the LCN to exercise control or influence in the conduct
of the affairs of the Union; or

(a) had actual knowledge that the person with whom he was associating
was an LCN member;

(b) reasonably should have known that the person
with whom he was associating was an LCN member; or

(c) deliberately
remained ignorant of facts that would demonstrate that the person
with whom he was associating was an LCN member. Fallacara, IHO
96-65D at 7.

The relationship to the affairs of the union
need not on its face affect the operation of the union; it need
only reflect that the "knowing association" permits
undesirable individuals to have easy access to the union officers
and members in the total atmosphere of the labor union operation.
See In the Matter of Trusteeship Proceeding Chicago Dist. Council,
IHO Order and Memorandum, 97-30T at 9 (February 7, 1998). See
also Fallacara, IHO 96-65D at 6 ?20.

The GEB Attorney must also demonstrate that
the charged party's association was "more than fleeting or
casual." See generally United States v. International
Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am.,
824 F. Supp. 410, 414 (S.D.N.Y. 1993); United States v. International
Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am.,
745 F. Supp. 908, 917-18 (S.D.N.Y. 1990), aff'd, 941 F.2d 1292
(2d Cir. 1991), cert. denied, 502 U.S. 1091 (1992)(contact that
was "knowing, purposeful and not fleeting" was enough
to constitute "knowing association").

The EDP and EPC incorporate certain exceptions
to the definition of "knowing association" which are
contained in a Consent Decree entered in the case of United
States v. District Council of New York City and Vicinity of The
United Bhd. of Carpenters and Joiners of Am., No. 90 Civ.
5722 (CSH), 1993 WL 364443 at *3-4 (S.D.N.Y. 1993) ("the
Carpenters' Consent Decree"). Those exceptions would permit
a LIUNA officer to --

1) Meet or communicate with a "barred
person" who is an employer to discuss the negotiation, execution
or management of a collective bargaining agreement, or a labor
dispute, when the officer represents, seeks to represent, or would
admit to membership the employees of that employer.

2) Meet or communicate with a "barred
person" who is a representative of a labor organization to
discuss union matters.

3) Meet or communicate with an officer, employee
or member of LIUNA and its constituent locals.

See id.

The Carpenters' Consent Decree also permits
a "member" who holds no elected, appointed or salaried
position in the union, or any constituent local, to meet or communicate
with "barred persons regarding matters unrelated to the union
or any constituent local."(1)Id. at 4.

"A 'barred person' is (1) any member
or associate of any La Cosa Nostra crime family or any other criminal
group, or (2) any person prohibited from participating in Union
affairs." EDP, Appendix B.

Obstruction of the GEB Attorney and
Inspector General

The LIUNA Appellate Officer has determined
that in "obstruction" cases involving false testimony
during depositions, the GEB Attorney must show that the testimony
was material and would have impeded the Inspector General's ("IG")
investigation by being misleading and intentionally deceptive.
See In Re Martire, 1997 A.O. 81 (97-008D). In order for
a statement to be considered material, "the statement must
have a 'natural tendency to influence, or [be] capable of influencing,
the decision making body to which it was addressed'." United
States v. Gaudin, 515 U.S. 506, 509 (1995), citing, Kungys
v. United States, 485 U.S. 759, 770 (1988).

Title 29 U.S.C. ?501(a)

The GEB Attorney also cites the following
statutory provision in support of his claims:

The officers, agents, shop stewards, and
other representatives of a labor organization occupy positions
of trust in relation to such organization and its members as a
group. It is, therefore, the duty of each such person, taking
into account the special problems and functions of a labor organization,
to hold its money and property solely for the benefit of the organization
and its members and to manage, invest, and expend the same in
accordance with its constitution and bylaws and any resolutions
of the governing bodies adopted thereunder, to refrain from dealing
with such organization as an adverse party or in behalf of an
adverse party in any matter connected with his duties and from
holding or acquiring any pecuniary or personal interest which
conflicts with the interests of such organization, and to account
to the organization for any profit received by him in whatever
capacity in connection with transactions conducted by him or under
his direction on behalf of the organization. A general exculpatory
provision in the constitution and bylaws of such a labor organization
or a general exculpatory resolution of a governing body purporting
to relieve any such person of liability for breach of the duties
declared by this section shall be void as against public policy.

29 U.S.C. ?501(a)(1959).

The IHO has determined that section 501(a)
was intended to prevent misuse of union funds and to forbid union
officials from receiving payments from third parties or making
a private profit from union contracts. Thus, the statute pertains
only to financial transactions. See In the Matter of Baker,
IHO Order and Memorandum, 97-55D at 13 (July 21, 1998). See
also, Guarnaccia v. Kenin, 234 F. Supp. 429, 442 (S.D.N.Y.
1964), aff'd sub nom. Gurton v. Arons, 339 F.2d 371 (2d
Cir. 1964) (ruling 29 U.S.C. ?501(a) not a catch-all for breaches
of fiduciary duty).

The Uniform Local Union Constitution

Article III, Section 3(d) of the LIUNA Uniform
Local Union Constitution requires that all members refrain
from "interfering with the proper conduct of all the business
of the Organization." Uniform Local Union Constitution, Article
III, Section 3(d).

In Baker, the IHO determined that, in order
to establish a violation of Article III, Section 3(d) of the Constitution,
the GEB Attorney must show that the charged member committed a
deliberate affirmative act which would constitute interference
with the proper conduct of union business. Baker, IHO 97-55D at 11.
Mere nonfeasance on the part of the member is insufficient.

Barred Conduct -- Knowing Association with
LCN Member: From in or about 1981 until in or about 1987, ARTHUR
A. COIA knowingly associated with a member of the Patriarca Family,
Raymond Patriarca, Jr., in violation of the barred conduct provisions
of the LIUNA EDP and EPC.

Barred Conduct -- Permitting LCN Influence:
In or about 1987, ARTHUR A. COIA knowingly permitted a member
of the Patriarca Family, namely Raymond Patriarca, Jr., to exercise
control or influence over the conduct of Union affairs, to wit:
at the behest of Raymond Patriarca, Jr., Coia assisted Nino Cucinotta
in joining Local 271 and in receiving job referrals, in violation
of the barred conduct provisions of the LIUNA EDP and EPC.

Charge III alleges:

Breaching Constitutional Duties of LIUNA
Members and Officers: In knowingly associating with an LCN member
and/or permitting him to influence Union affairs, as alleged more
specifically above in Charges I and II, ARTHUR A. COIA failed
to honor his obligation as a LIUNA member to refrain from interfering
with the proper conduct of LIUNA business, and breached his duty
as an Executive Board member of Local 271 to see to it that the
affairs and business of his Local Union were properly conducted,
in violation of Article III, Section 3(d) and Article IV, Section
4(H)(9) of the Uniform Local Union Constitution.

7

Chronology

The following chronology(3) is relevant to
understanding the context of the above charges:

In the late 1950s, at the age of 13, Thomas
Hillary ("Hillary") met Raymond Patriarca, Jr. ("Patriarca,
Jr.") in Providence, Rhode Island. Patriarca, Jr. is the
son of Raymond Patriarca, Sr. ("Patriarca, Sr."), an
LCN member.

Hillary dropped out of school at age sixteen
in order to spend his time at the Patriarca family headquarters
known as "the Office."

Patriarca, Jr. married in the mid 1960s and
Patriarca, Sr. moved out of the Patriarca family home. Thereafter,
Hillary and Patriarca, Sr. lived together in a one bedroom apartment.

Patriarca, Sr. went to prison in 1969 and
remained there until 1973.

In the early 1970s, Hillary rendered some
minor assistance to a political campaign in which Albert Lepore,
Jr. ("Lepore, Jr.") was a candidate for Rhode Island
State Representative. Lepore, Jr. was Coia's law partner.

In 1974, Hillary moved to Las Vegas, Nevada
where he remained until 1980.

Hillary moved to Boston, Massachusetts in
1980.

In 1981, Coia and his father, Arthur E. Coia
("Coia, Sr."), were indicted, along with Lepore, Jr.
and Patriarca, Sr. in Miami, Florida.

In 1982, Patriarca, Sr.'s case was severed
from the Florida prosecution and was transferred to the District
of Rhode Island due to his illness.

Antonino "Nino" Cucinotta ("Cucinotta")
became Patriarca, Jr.'s driver in 1981 and continued in that role
until approximately 1986.

Between 1981 and 1984, Patriarca, Jr., on
behalf of his father, visited Coia's law office, Coia & Lepore,
to meet with defense attorneys working on the case in Florida.

Sometime between 1981 and 1984, Coia and
Patriarca, Jr. attempted to breed one of Coia's champion male
Rottweilers with one of Patriarca, Jr.'s champion female Rottweilers
at Coia's kennel, Southwind Farms, in Rehoboth, Massachusetts.
Patriarca, Sr. died in 1984.

The case in Florida was dismissed against
Coia and the other defendants in December of 1984.

Hillary moved to Palm Springs, California
in 1985.

Hillary returned to Boston in 1988.

Introduction

Charges I and III are based upon the following
three alleged incidents:

Patriarca, Jr. visited Coia's law firm, Coia
& Lepore, between July of 1984 and April of 1986. Coia allegedly
represented Patriaria, Jr. in a legal matter.

The GEB Attorney alleges that Coia knowingly
associated with Patriarca, Jr., a member of the LCN, from
1981 through 1987, in violation of the EPC, EDP and the LIUNA
International Union Constitution ("International Constitution").

In addition, the GEB Attorney alleges certain
other incidents which occurred outside of this 1981 to 1987 time
period. These incidents are:

In the early 1970s, Coia participated in
his law partner's campaign for a seat in the Rhode Island State
Legislature and, during this campaign, an LCN member assisted
with one of the campaign's advertising projects.

In the late 1980s, Coia and Patriarca, Jr.
allegedly had a brief conversation on a construction site
in Rhode Island.

In 1990, Coia allegedly had a conversation
with Hillary regarding a young man who was engaged to Coia's daughter.

In his opening statement on April 14, 1998,
the GEB Attorney asserted that the core of the evidence on Charges
I through III would come from the testimony of Cucinotta, but
that the context of the charges -- the "relationship"
between the Patriarca family and the Coia family -- would come
from Hillary. Transcript ("Tr.") 11. The GEB Attorney
further asserted that, "[A]t every point of tangency between
Tommy Hillary and Nino Cucinotta, Mr. Hillary [would] confirm
Mr. Cucinotta in every significant respect." Tr. 15.

As demonstrated below, Hillary failed to
corroborate Cucinotta on any material point.

In his post-hearing briefs, the GEB Attorney
informed the IHO that Cucinotta was not credible on some points.
GEB Attorney Response Brief ("GEB Resp. Br.") at 2.
He specifically abandoned his reliance on Cucinotta and conceded
that "Cucinotta's testimony should be credited only in certain
respects" but not all respects as originally intended.
See id. (emphasisadded). The GEB Attorney failed to identify
what those "certain respects" were other than
to say that Cucinotta's description of the inside of Coia &
Lepore was extremely detailed. Id. at 5. The GEB Attorney
also dropped Charge II, which was based on Cucinotta's testimony.
GEB Br. at 52 n.2. The evidentiary effect of these concessions
will be discussed, infra at ??63-4.

Findings of Fact

The Hillary Allegations

History/Background

Coia has been a member of LIUNA since 1957.
General Executive Board Attorney Exhibit ("GEB Ex.")
200, Tab B at 7. During the time period of 1981 through 1987,
Coia served as LIUNA's Assistant Regional Manager for the New
England Region, the Business Manager for the Rhode Island Laborers'
District Council and the Vice President of Local 271. GEB Ex.
200, Tab B at 7-8, Tab E at 31-32. He and Lepore, Jr. were also
partners during this same time period in the law firm of Coia
& Lepore located in Providence, Rhode Island. Tr. 4804.

Hillary became friends with Patriarca, Jr.
in the late 1950s, when they were both 13 years old. Tr. 394-95.

Hillary also knew Patriarca, Sr. very well
and regularly visited the Patriarca home. Tr. 397-98. Patriarca,
Sr. grew to like Hillary and confided in him. Tr. at 397.

Hillary quit school in the early 1960s when
he was 16 years old and moved into the Patriarca home in Providence.
Tr. 397. Patriarca, Sr. told Hillary that he was having
trouble with "the Feds" and asked him to take care of
his wife who was dying of cancer. Tr. 399-400. Hillary took care
of Mrs. Patriarca every day until she died in the mid 1960s. Tr.
400. He went to her funeral in the Patriarca family car. Tr. 401.

In the mid 1960s, Hillary was the best man
for Patriarca, Jr. at his wedding. Tr. 401.

When Patriarca, Jr. married, his father moved
out of the family home and turned it over to Patriarca, Jr. and
his new wife. Tr. 401-02.

Hillary and Patriarca, Sr. then moved into
a one bedroom apartment, where they lived together for about a
year. Tr. 402-03.

Hillary, who is currently in the Federal
Witness Protection Program, testified herein on April 15 and
16, 1998. Tr.

382-825. The GEB Attorney asserted in his
opening statement that Hillary was called as a witness for two
purposes: to establish the "context" of the Patriarca-Coia
connection and to corroborate Cucinotta's testimony. Tr. 11-15.

Patriarca, Sr. was the Boss, or the head,
of the New England LCN family(4) and conducted his illicit mob
operations from the premises of his family business, Coin-o-matic
Distributers, National Cigarette Service ("Coin-o-matic")
located on Atwells Avenue in Providence, Rhode Island. Tr. 404.
The family referred to the Coin-o-matic location as "the
Office." Id. Hillary and Patriarca, Jr. frequented "the
Office" whenever they were not in school. Tr. 397.

Hillary was at "the Office" every
day from the early 1960s until Patriarca, Sr. went to jail in 1969.
Tr. 404-05.

Hillary testified that Patriarca, Sr. and
Coia, Sr. were good friends, and he saw Coia, Sr. at "the
Office" on a regular basis. Tr. 411-12.

The GEB Attorney portrayed Hillary as a person
with knowledge of the inner workings of the Patriarca family,
its members and associates. He characterized Hillary as a "surrogate
son to Raymond Patriarca, Sr. and . . .very well the son that
Raymond Patriarca, Sr., wished he had had." Tr. 12.

Hillary's
testimony was offered to show Coia's purported connection with
Patriarca, Jr. and he testified to three events which, according
to the GEB Attorney, demonstrated this illicit association. Those
events are set out below.

Coia's Association with Hillary During
Lepore, Jr.'s Campaign

Hillary testified that, in the early 1970s,
Lepore, Jr., Coia's law partner, ran for a seat in the Rhode Island
State Legislature. Tr. 441, 657, 717-31.

Lepore, Jr. had participated in Rhode Island
politics for a number of years prior to this campaign. Tr. 3736-37.

Hillary testified that his contribution to
the campaign consisted of renting a trolley and driving it around
Providence as a means to promote Lepore, Jr.'s candidacy. Tr.
451-53, 724, 729.

Hillary stated that he saw Coia "around"
during the campaign but no testimony was offered as to what activity
Coia performed during the campaign. Tr. 453.

The GEB Attorney concedes in his responsive
brief that there was "nothing sinister" about Hillary's
supposed contact with Coia during Lepore's political campaign.
See GEB Resp. Br. at 3.

The conclusion one is to draw from these
facts is unclear. It appears the GEB Attorney is alleging some
connection between Coia and Patriarca, Jr. due to the fact that
Hillary had some minor participation in the same political
campaign as Coia. Aside from this vague suggested connection,
Hillary's testimony on this matter was sharply contradicted on
all major points, including the year of the campaign and who the
candidate was. Tr. 730-31. There was no evidence that Coia and
Hillary actually met or spoke during the campaign.

The fact that Coia and Hillary may have had
some unspecified contact during a political campaign in the
early 1970s carries little, if any, weight in the factual determination
of this matter.

The Kendall Estates Incident

In 1988, Hillary returned to New England
after a three year absence. Tr. 465-66.

Hillary testified that, sometime in the late
1980s, he was with Patriarca, Jr. at Kendall Estates, which was
a housing development Patriarca, Jr. was building outside
of Providence, Rhode Island. Tr. 468-70, 656, 697.

While at Kendall Estates, Hillary testified
that he saw a car operated by Coia drive onto the site and
that Patriarca, Jr. allegedly approached the vehicle and spoke
briefly to Coia, before the car drove away. Tr. 698-701.

At the time in question, Hillary had not
seen Coia in approximately fifteen years and could not explain
how he identified him as the driver. Tr. 701, 708-09. The record
further reflects that Hillary --

was unable to provide any distinguishing
characteristics about the driver;

heard none of the conversation involved;

did not discuss the matter with Patriarca, Jr. after the car departed;

could not remember whether anyone else was
in the car at the time; and

could not remember what kind of car it was.

Tr. 699-700; 708-09.

Hillary stated that this incident at Kendall
Estates was the only time he saw Coia with Patriarca, Jr. Tr.
656.

Hillary's testimony concerning the Kendall Estates incident carries little, if any, weight in the factual
determination of this matter.

The Union House Incident

During the late 1980s, Philip Ottavianni,
Jr. ("Ottavianni, Jr.") was a LIUNA International Representative
and his family owned the Union House Restaurant located in the
same building as the Massachusetts District Council. Tr. 473,
736. Ottavianni, Jr., was also engaged to marry Coia's daughter.
Tr. 732-33.

Hillary testified that, during an evening
in 1989 or 1990, he was in the bar of the Union House when he
encountered Coia, whom he had not seen in approximately fifteen
years.(5) Tr. 476-77. Ottavianni, Jr. was also present in another
area of the bar. Tr. 476.

Hillary told Coia that he had "taken
over" the Framingham area and Coia's response was "good."
Tr. 478.

Coia allegedly asked Hillary about the reputation
of Ottavianni, Jr. and was told that the young man was financially
indebted to many people and that he was involved in gambling and
drug usage. Tr. 478-79.

The entire conversation between Hillary and
Coia in the bar at the Union House lasted only a few minutes.
Tr. 478-79.

From this short conversation between Hillary
and Coia, the GEB Attorney argues that 1) Coia had knowledge of
Hillary's mob connections and 2) Coia had sought the advice of
a mob figure. The GEB Attorney further asserts that Hillary's
testimony shows that Coia was "part of an overall network
of quid pro quos, of favors, of back scratching" between
Coia and the LCN. Tr. 15-16.

Even if this event took place, the conversation
between Hillary and Coia is hardly indicative of an LCN-related
encounter in which favors were exchanged.

Hillary's comment that he had "taken
over" the Framingham area, and Coia's alleged response of
"good," is meaningless in this context. There is no
evidence to give it a sinister connotation.

The IHO does not find Hillary's testimony
concerning this incident to be indicative of any relationship
between Coia and the LCN, nor does such testimony establish any
association between Coia and any organized crime associate or
element.

Coia's Meetings With Patriarca, Jr.
at the Offices of Coia & Lepore

Meetings During the Time Period From
1981 Through 1984

In September of 1981, Coia was indicted along
with his father, Lepore Jr. and Patriarca, Sr. in United States
v. Coia, No. 81-417-CR-JLK (S.D. Fla.) (the "Hauser case").(6)
See Respondent's Exhibit ("R. Ex.") 32.

Coia and Lepore, Jr. were indicted for allegedly
accepting a $30,000 legal fee from a Florida insurance
company as a ruse to transfer a bribe from that company to Coia,
Sr. who, at the time, was LIUNA's General-Secretary Treasurer.
Tr. 4809.

Due to his illness, Patriarca, Sr.'s case
was severed and was transferred to the District of Rhode Island
in February or March of 1982. See R. Ex. 32, 32A.

Attorneys for the defendants in the Hauser
case held joint defense meetings at the law offices of Coia &
Lepore. Tr. 3752, 3994-95, 4550. Patriarca, Jr. attended these
meetings on behalf of his father who was ill and unable to attend.
Tr. 4815. Coia met Patriarca, Jr. for the first time at these
meetings. Tr. 4813.

The Hauser case was dismissed in December
of 1984 on a Rule 29 motion at the end of the government's case.
R. Ex. 124 at

2716-17.

The GEB Attorney concedes that Coia, as a
defendant in a criminal matter, could properly associate
with Patriarca, Jr. for the purposes of the joint defense meetings
held at Coia & Lepore. See GEB Br. at 58.

The IHO finds that Coia's meetings with Patriarca,
Jr. at Coia & Lepore for purposes of the joint defense were
not an association amounting to "barred conduct."

Meetings Between 1984 and 1987

The GEB Attorney further argues that Coia
and Patriarca, Jr. continued to meet after the Hauser case was
resolved and that, during this time period, Coia performed legal
work for Patriarca, Jr. GEB Br. at 57. These alleged meetings,
he contends, were "barred conduct."

The GEB Attorney attempted to prove that
these alleged meetings occurred through Cucinotta's testimony.
Tr. 19.

Cucinotta, who is currently incarcerated
and in the Federal Witness Protection Program, testified herein
on April 16 and 17, 1998. Tr. 839-1059.

Cucinotta testified that he was Patriarca,
Jr.'s driver for approximately five years and that he drove Patriarca,
Jr. to the offices of Coia & Lepore two to four times a week
for a period of two years from July of 1984, after Patriarca,
Sr. died, until April of 1986. Tr. 875-76 (testifying that he
drove for Patriarca, Jr.), Tr. 884-86 (testifying that he drove
Patriarca, Jr. to Coia & Lepore), Tr. 963-65 (indicating dates
he drove Patriarca, Jr. to Coia & Lepore). See also R. Ex.
49. Cucinotta stated that he waited for Patriarca, Jr. inside
the law offices and, while waiting, he spoke briefly to the secretaries
and often fell asleep in a chair near where the secretaries were
working. Tr. 885-86, 965.

Cucinotta was born on January 1, 1942 in
Sicily. Tr. 839-40. He has a fifth grade education and began work
as a butcher when he was eight years old. Tr. 840-01. In 1961,
when he was 19 years of age, he came to the United States and
continued to work as a butcher. Tr. 841.

Cucinotta met the Patriarcas for the first
time in 1975. Tr.

FONT FACE="Courier">846-47. He knew the Patriarcas were mobsters,
but began spending time at the Coin-o-matic in order to make money.
Tr.

846-49. He sold sandwiches, coffee and sodas
at the Bradford Club, located above the Coin-o-matic, and
Patriarca, Jr. gave him a cut of the money that was collected
from card games played there. Tr. 848-49.

In 1994, Special Agent William Shay of the
Federal Bureau of Investigation ("FBI") reported to
the local police that "Cucinotta was brought over from Italy
years ago to do a hit for [the] Patriarca [family], and after
the hit he became a made man and [Patriarca's, Jr.'s] driver."
R. Ex. 45 at 2. This same story was told by Shay to Luigi Reali
("Reali"), a former Rhode Island State Trooper, who
testified herein. Tr. 4278.

During the more subdued portions of Cucinotta's
testimony, he attempted to portray himself as a reluctant mob
member and a gentleman gangster who ended up in the LCN by accident.
When asked if he spoke to a certain secretary at Coia & Lepore,
he said, "I just show all kind of respect to any lady."
Tr. 966.

Cucinotta related an incident that took place
in either 1975 or 1976, in which Patriarca, Jr. told him to go
to a restaurant and tell a man named Johnny Carr ("Carr")
that Jackie Sisilini ("Sisilini") wanted to see him
in his office. Tr. 849-50. Cucinotta delivered this message and
Carr was killed when he went to the location. Later, when discussing
Carr's murder, Cucinotta was told "another guy went to California"
(had been murdered) by Sisilini, Billy "Blackjack" DelSanto
and Frankie "Bo Bo" Maurapisi. Tr. 853-56. Cucinotta
claimed that he had no idea Carr was being set up for the hit
when he delivered the message. Tr. 857. The IHO finds this statement
not credible.

Cucinotta stated that, after this incident,
he felt afraid and he came to realize that he was getting involved
in the mob. Tr. 857-58. The IHO finds this statement not credible
as well.

Cucinotta was inducted into the LCN during
a formal ceremony in October of 1977. Tr. 861-66. He testified,
however, that he was unaware the ceremony would take place; he
was simply called to a meeting and, once there, found out that
he was to be inducted. See id. The IHO does not find credible
Cucinotta's testimony that he was inducted into the LCN by surprise.

In 1988, Cucinotta sustained a head injury
which apparently caused the onslaught of certain psychiatric problems
which remain to this day. Tr. 920-21 (describing head injury).
In fact, he stated at the hearing herein that his "head [was]
not right" and that it had not been right since 1988. Tr.
993-1000.

Cucinotta admitted he has a history of psychiatric
problems consisting of depression, feelings of hopelessness, suicidal
tendencies, anxiety attacks, persistent headaches and difficulty
with concentration. Tr. 993-1000; R. Ex. 48. These conditions are corroborated by medical records
from the Rhode Island Workers' Compensation Board. Id.

Cucinotta began suffering from depression
in 1989 and once admitted to a doctor that he felt like going
to the highest bridge and jumping. Tr. 993-1000. He has contemplated
suicide and often breaks down and cries. (He broke
down at least twice on the witness stand in this case). See id.
Cucinotta testified that he sometimes became so confused while
driving his car that he was unable to find his way home. Tr. 996.
When this happened, he would park the car "and just stay
there and break down and cry." Id.

When questioning Cucinotta about his criminal
history, the GEB Attorney asked him if he had committed a double
murder on April 1, 1994. Tr. 922.

Cucinotta described the night he committed
the double murders of Ronald Capola ("Capola") and Peter
Scarpallini ("Scarpallini") in shocking detail. His
narrative reminded one of an actor performing the Stanislavsky
method of using mental recall of past experience to portray the
present. The drama with which he related the story of the night
he murdered the two men was chilling. He had clearly removed himself
from reality and then recounted the murders as though they had
happened only moments before. As he stood in the witness box,
the story flowed from him with mixed emotions of intense anger,
sadness, regret, bitterness and defeat and, once he began to speak,
he was not to be stopped until his confession was complete. Tr.
923-37.

Cucinotta's testimony about the murders is
summarized as follows: On April 1, 1994, he was at the
St. Mary's social club in Johnston, Rhode Island with his close
friend Nicky Leonardo, whom he referred to as "Nicole."
Tr. 925. Capola, whom Cucinotta referred to as a long time "close
friend," was also at the club. Tr. 926. Cucinotta testified
that he was getting a beer from behind the bar when he was interrupted
by Scarpallini who told him that Capola no longer wanted him in
the club. Tr. 929. This infuriated Cucinotta. He left the club,
retrieved a handgun, then returned and shot Capola and Scarpallini
to death. Tr. 929-37.

On May 2, 1995, Cucinotta pled guilty to
second degree murder for the Capola and Scarpallini killings.
R. Ex. 46-47. He was sentenced to an aggregate term of 120 years
in prison. Id.

After Cucinotta finished his testimony concerning
the murders, the IHO put the following statement on the record:

[D]uring the last 10 minutes of this testimony,
[Cucinotta] was standing and it is my impression that he was very
emotional, his voice broke a number of times. He did not sit and
was extraordinarily agitated, and I think the record ought to
reflect that the testimony was not in a peaceful manner. He stood
up and was extremely agitated, gestured a lot and hammered the
table and broke down several times.

Tr. 943-44.

In December of 1994, as part of a plea agreement,
Cucinotta was scheduled to testify at the sentencing hearing in
a federal criminal case involving Patriarca, Jr. Prior to that
hearing in October of 1994, the trial Judge examined him for two
days in camera and the transcripts of that examination remain
under seal. R. Ex. 36. In a published opinion, however, United
States District Court Judge Wolf stated that, "Cucinotta,
while competent for the purpose of deciding whether to cooperate
with the government, was emotionally very fragile and plainly
vulnerable to being effectively impeached." United States
v. Patriarca, 912 F. Supp. 596, 630 (D. Mass. 1995). See R. Ex.
37. Cucinotta did not testify at the sentencing hearing.

When questioned about a cooperation agreement
into which he had entered with the government in the Patriarca,
Jr. matter and his concomitant motions for sentence reduction,
Cucinotta denied having any knowledge of them. Tr.
1003-04, 1017-18; R. Ex. 39, 41, 42. He tried to explain that
"I got the fifth grade [education]. . . . I know how to just
read and write in Italian. . . . I don't know how to read and
write in English." Tr. 1004. When pressed further about the
existence of his 1995 motion for sentence reduction, he stated
"They didn't make no deal with me. . . I don't know. I don't
know if yes, if not, I don't know." Tr. 1018.

In his responsive brief, the GEB Attorney
candidly concedes that Cucinotta's evidence does not establish
"the frequency of meetings" between Coia and Patriarca,
Jr. GEB Resp. Br. at 2 n.1. This concession should be considered
with the GEB Attorney's dismissal of Charge II. Cucinotta's
testimony was to be the evidence to support that charge also.
Cucinotta's bizarre performance on the witness stand and his severe
psychiatric problems, in combination with the GEB Attorney's concession
and his dismissal of Charge II, leads to the conclusion that,
as a witness, Cucinotta is not credible.

On April 16, 1998, counsel for Coia received
a letter from Assistant United States Attorney Craig Oswald regarding
a review of the FBI surveillance files of Patriarca,
Jr. GEB Ex. 7.

The FBI surveillance files produced by the
Department of Justice ("DOJ") reveal that Patriarca,
Jr. was seen at the offices of Coia & Lepore on only four
occasions: March 3, 1982, June 2, 1982, June 7, 1982 and June
9, 1982.(7) R. Ex. 33.

Luigi Reali

Reali has been the Director of Security for
LIUNA since July 1, 1995. Tr. 4208-09. Although he often works
as Coia's bodyguard, his testimony was independently corroborated
by at least six other witnesses, as well as other credible evidence.
The IHO finds Reali's testimony to be credible.

Reali was a member of the Rhode Island State
Police for 18 years from 1971 through 1989 and was a member of
the department's organized crime intelligence unit from 1983 until
his retirement in 1989. Tr. 4209-11.

From January of 1985 through May of 1985,
Reali was the head of a squad detailed to surveil Patriarca, Jr.'s
movements 24 hours a day, 7 days a week. Tr. 4213. This surveillance
was later scaled back to the daylight hours from May of 1985 though
September of 1985. Tr. 4215-16.

Reali testified that neither he nor his squad
ever saw Patriarca, Jr. at the law firm of Coia &
Lepore during this surveillance and never saw Patriarca, Jr. meet
with Coia. Tr. 4215.

In January of 1986, a task force created
among the Rhode Island State Police, the FBI, and the Providence
Police placed a listening device, "a bug," in Patriarca,
Jr.'s car. Tr. 4219. The bug was placed in the vehicle in January
of 1986 and it required continuing surveillance of Patriarca,
Jr.'s car. Tr. 4220-21.

Reali stated that the Rhode Island State
Police worked closely with the FBI on a daily basis from September
of 1985 through 1986 and that he was unaware of any sightings
of Patriarca, Jr. visiting Coia & Lepore or any contact between
Coia and Patriarca, Jr. during this time. Tr. 4224-25, 4285 86.

In response to a Court Order, the legal counsel
to the Rhode Island State Police sent Coia a letter which
stated,

. . . please be advised that the Rhode Island
State Police files specifically relating to Arthur A. Coia, Arthur
E. Coia, Raymond Patriarca, Jr. or the Laborers International
Union of North America covering the period 1984 to 1986 do not
contain any documents that would tend to indicate that Patriarca,
Jr. visited several times per week for many weeks with Arthur
A. Coia or at the Arthur E. Coia building at 226 South Main Street,
Providence, Rhode Island.

R. Ex. 363.

Affidavits were submitted herein by Richard
Tamburini, the head of the Providence Police Department's Organized
Crime Division from 1981 to 1988 and the current Chief of
Police in Johnston, Rhode Island, and John Scuncio, a former member
of the Rhode Island State Police Intelligence Unit and currently
the Chief of Police in Hopkington, Rhode Island. R. Ex. 364, 365.
The affidavits indicate that they have no knowledge of any association
between Coia and Patriarca, Jr. or that any regular meetings between
Coia and Patriarca, Jr. took place at Coia & Lepore or elsewhere
from 1984 through 1986. See id. The IHO credits these affidavits.

Santos was a receptionist from September
of 1983 until March of 1984 when she became a full-time secretary.
Tr. 4204-05. After March of 1984, her desk was located in the
common area of the office space. She testified that she never
saw Patriarca, Jr. at Coia & Lepore and that she would have
noticed him at the office had he visited. Tr. 4206-07. See R.
Ex. 359 (map of office).

Although all five women are former employees
of Coia, they corroborated one another, and their testimony is
consistent with other credible evidence herein. As such, the IHO
finds them to be credible witnesses.

Armand Sabitoni

Sabitoni, International Vice President and
New England Regional Manager, testified herein on June 2-3, 1998
in Washington, D.C.

Tr. 3727-4049.

Sabitoni was an associate attorney at Coia
& Lepore in the early 1980s and became a partner in August
of 1986. Tr. 3731.

Sabitoni testified that he recalled the Hauser
case and the joint defense meetings that were held at Coia &
Lepore. Tr. 3750 (recollecting Hauser case); Tr. 3752 (recollecting
defense meetings). He was present at the firm during one of these
meetings and learned from the secretaries that there had been
others. Tr. 3752-55.

During the 1980s, Sabitoni spoke with Coia
several times a day since their offices were only about 30 feet
apart, and he would have known if Patriarca, Jr. had been a regular
visitor to the firm. Tr. 3762-70, 3816-18. Sabitoni stated that
between August of 1984 and April of 1986, Patriarca, Jr. did not
visit Coia & Lepore. Tr. 3769.

Although Sabitoni now works closely with
Coia as an International Vice President, and has had a personal
friendship with him for many years, his testimony is corroborated
by Reali, the five former secretaries of Coia & Lepore, and
the FBI surveillance files. The IHO finds his testimony to be
credible.

The IHO's Site Visit to Coia & Lepore

On June 10, 1998, the IHO and all counsel
made a site visit to the law firm of Coia & Lepore. Tr. 4173-78.
The firm's office suite consists of a reception area and a separate
office enclave in which the individual attorney's offices open
onto a central area containing the secretaries' cubicles. These
cubicles are approximately four feet high and a secretary seated
behind one could easily see the entire office space.

If Cucinotta sat in the inner office area
which he described, he would have been plainly visible to everyone
in the office.

The room is such that any person passing
through would be seen by all of the secretaries. Sabitoni stated
during the site visit that the center office space was "wide
open" in the early 1980s because only four secretaries cubicles
were there at the time, rather than the six currently there. Tr.
4172-73. Sabitoni also stated that the area was not as congested
then as it was during the IHO's site visit. Tr. 4174.

Based upon the site visit, the IHO finds
that Patriarca, Jr. could not have visited Coia & Lepore on
a regular basis without the secretaries and other attorneys in
the office being aware of it. As such, their testimony is inconsistent
with Cucinotta regarding the frequency of meetings both prior
to and after 1984.

The IHO places no weight on Cucinotta's testimony
and credits the testimony of the office personnel and
the other sources of information.

Legal Work Performed by Coia &
Lepore for Patriarca, Jr.

The GEB Attorney alleges that Coia performed
legal work for Patriarca, Jr. and, indeed, it appears that
Coia & Lepore incorporated one of Patriarca, Jr.'s companies.
Tr. 4855-58; GEB Ex. 213. When asked about this work, James Lepore,
another attorney in the firm, stated that the matter comprised
only five or six hours of billable time. GEB Ex. 213; R. Ex. 389.
The invoice sent to Patriarca, Jr. for this work was in the amount
of $711.85 and it reflected that the services and costs involved
were: the incorporation of a business, filing fees, a corporate
kit, and the preparation of the annual report and minutes. GEB
Ex. 213, R. Ex. 389.

Coia testified that he never worked on the
file and that he only learned of its existence when he was preparing
for one of his depositions in this case. Tr. 4855-56.

The IHO does not find the evidence of any
legal work performed by the law firm probative as to a "business
relationship" between Coia and Patriarca, Jr. or to Coia's
alleged relationship with the LCN.

Coia's Association with Patriarca,
Jr. and the Rottweiler Breeding

From the early 1980s until either 1990 or
1991, Coia and his wife owned a dog breeding kennel known as Southwind
Farms. R. Ex. 369. This facility had been recognized by the American
Kennel Association and was renowned for producing champion Rottweilers.
Tr. 4823, 4827. See R. Ex. 369-377A-C.

Coia testified that, during the preparation
of the joint defense in the Hauser case, Patriarca, Jr. saw pictures
of Coia's champion Rottweilers in his office at Coia & Lepore.
Tr. 4850. Patriarca, Jr. was also a Rottweiler enthusiast and
he sent one of his own dogs to be bred at Southwind Farms in 1982
or 1983. Tr. 4852-53. Coia's wife and a dog handler conducted
the breeding, which was unsuccessful. Tr. 4854.

There is no indication that Coia had any
contact with Patriarca, Jr. during the course of the breeding.

Patriarca, Jr.'s FBI 302 Statement

An FBI report (commonly known as a "FBI
302") of an interview, given by Patriarca, Jr. to the FBI
on August 8, 1996, (the "Patriarca 302"), was offered
into evidence during the hearing. R. Ex. 49A. The Patriarca 302
was made available to Coia by the DOJ.

The Patriarca 302 contains the following
language

. . . [although] Coia, Sr. and [Patriarca,
Jr.'s] father had a long term business relationship, he never
had such a relationship with Arthur A. Coia. Patriarca added that
'no one who reports to him [Patriarca, Jr.] has any such relationship
to Arthur A. Coia', and added that 'Arthur [A. Coia] does not
have the balls to be a gangster.

R. Ex. 49A.

Discussion

A complicating factor in determining Charges
I and III is the relationship between Coia, Sr. and Patriarca,
Sr. It is a factual element which confuses the analysis of the
charges. In this proceeding and others heard by the IHO, there
was testimony that Coia, Sr. had a relationship with Patriarca,
Sr. as well as other LCN members across the country.(8) Some allegations
are credible, others are patently incorrect. Coia, Sr. died in
March of 1993, and no issue regarding his activities has been
presented to the IHO for a determination. Nevertheless, allegations
of certain acts or relationships of Coia, Sr., correct or incorrect,
are necessarily present in the chronology of this and other cases.

The problem for the fact finder with the
background presence of Coia, Sr. is that events are often described
with him being the actor, with an inference that his son, who
was also in the union hierarchy at the time, shared responsibility
or knowledge of them. Indeed, the GEB Attorney often makes the
statement that Coia was "the son of a legendary Rhode Island
labor leader within LIUNA and himself an heir apparent for high
office within LIUNA." GEB Br. at 58-59. See GEB Resp. Br.
at 6. Another example of this appears in the testimony of Hillary
and Cucinotta, both of whom stated that persons were sent to Local
271 by the Patriarcas to obtain jobs and that, allegedly, Coia,
Sr. made the arrangements. No witness, however, implicated Respondent
Coia in obtaining jobs for them at Local 271 and, indeed, the
GEB Attorney abandoned this allegation. In reading the transcript,
however, the questioning by the GEB Attorney of certain witnesses
implied that Respondent Coia was deeply involved in arranging
jobs for Patriarca family members and associates merely by invoking
the name Coia, Sr.

The GEB Attorney's position on Patriarca,
Jr.'s visits to Coia & Lepore should be viewed in a historical
spectrum. At the outset, the GEB Attorney contended in his opening
statement that Coia met regularly with Patriarca, Jr. from 1984
through 1987 at Coia & Lepore. These meetings were to be proven
by Cucinotta and then corroborated by Hillary although Hillary
had no firsthand knowledge of these matters. The GEB Attorney
said that the core of the evidence would be from Cucinotta and
Hillary would confirm Cucinotta in every significant respect.
Tr. 11, 15.

Both parties agree there were visits to Coia
& Lepore by Patriarca, Jr. during the pendency of the Hauser
case. The problem arose that Cucinotta, perhaps out of simple
mistake, perhaps out of his desire to testify somewhere in order
to obtain a sentencing reduction, or perhaps a combination of
both, testified that the visits continued for far beyond the period
of time that any other witness recalled. As determined above,
this testimony runs contrary to the surveillance evidence, witness
testimony, and common sense.

Moreover, Cucinotta's bizarre performance
on the witness stand, and his impeachment during cross examination,
caused the GEB Attorney to distance himself from him. In fact,
the GEB Attorney stated in his post-hearing brief that the evidence
did not establish ." . . the frequency of meetings between
Coia and Raymond, Jr. after 1984 as recalled by Raymond, Jr.'s
driver, Anthonio [sic] Cucinotta." GEB Resp. Br. at 2 n.1.
In other words, although Cucinotta is the GEB Attorney's witness,
one cannot believe everything he said. As noted earlier, Hillary
made no contribution to the proof of this matter. Although asserted
to be probative by the GEB Attorney in his opening statement,
the Hillary/Cucinotta combination simply disintegrated once both
witnesses appeared on the witness stand, and there is no evidence
of Patriarca, Jr. and Coia meeting after 1984.

Nevertheless, the GEB Attorney argues in
his post-hearing briefs that, due to Coia's position in the 1980s
as an up and coming LIUNA labor leader and Patriarca, Jr.'s position
as a made member of the LCN and the son of the Boss of the New
England LCN family, "any contact between Coia and Raymond,
Jr. conveyed the unmistakable message that the LCN had significant
influence within LIUNA." GEB Br. at 59 (emphasis omitted).
See GEB Resp. Br. at 5-6. He further argues that the "unique
positions" of Coia and Patriarca, Jr. send a message to the
union membership that the LCN has "easy access to the Union
officers and members in the total atmosphere [of the] labor union
operation." GEB Br. at 60, citing, Fallacara, IHO 96-65D
at 6, ?210. This argument flies in the face of his concession
that the joint defense meetings between Coia and Patriarca, Jr.
were proper.

The GEB Attorney also relies extensively
on the Patriarca family influence at Local 271. Although, historically,
the Patriarcas may have had influence at that Local during Coia,
Sr.'s tenure, it is not relevant to the charges here against Respondent
Coia and will not be considered by the IHO in rendering his final
decision.

The GEB Attorney also implicitly argues that
there was an improper relationship between Local 271 and the law
firm of Coia & Lepore since it shared office space with the
Local and did extensive legal work for it. This argument does
not have any probative value relative to the charges in this matter.

The GEB Attorney, citing the Fallacara test
for "knowing association," also contends that the mere
appearance of mob access to the union is sufficient to discipline
a union official. See supra pp. 2-3. There is no indication in
the record, however, that Patriarca, Jr. had access to the union.
He visited Coia at Coia & Lepore on only a few occasions.
No credible evidence was put forth to show that he and Coia were
together at any other time.

Teamsters Case Law

The GEB Attorney offers a number of cases
decided by the Court appointed Independent Administrator of the
International Brotherhood of Teamsters ("IBT" or "Teamsters")
as well as certain federal court decisions to support his position,
but the language quoted therefrom is taken out of context. All
of those cases deal with Teamster union officials who either invited LCN figures
into their union, regularly socialized with them, or sought their
assistance in union affairs. An examination of the facts in those
cases reveals far different fact patterns than the one presented
here.

In all of the Teamsters' cases cited by the
GEB Attorney, the relationships between the charged persons
and the LCN members and associates continued for a number of years,
on regular social and business levels.

In United States v. International Bhd.
of Teamsters, Chauffeurs, Warehousemen and Helpers of Am. ("DiGirlamo"),
824 F. Supp. 410 (S.D.N.Y. 1993), DiGirlamo was the bookkeeper
for IBT Local 41 in Kansas City, Missouri and the evidence therein
established that he associated with four men -- Charles Moretina,
James Moretina, Peter Simone ("Simone"), and Frank Tousa
("Tousa") -- whom he knew to be members of the Kansas
City LCN. Id. at 414-416 (discussing association with C. Moretina,
J. Moretina, P. Simone and F. Tousa).

DiGirlamo's car was observed by the FBI outside
of Charles Moretina's house during working hours. He also attended
Charles Moretina's criminal trial and visited him several times
in prison. Id. at 416. James Moretina and Simone hired DiGirlamo
as an accountant for their business -- Be Amused Vending Company--
and he would occasionally go to Simone's illegal gambling hall to pick
up the company's books. In fact, during his tenure as the company's
accountant, the FBI seized illegal gambling equipment which the
company owned, and James Moretina and Simone were eventually convicted
for money laundering and illegal gambling. Id.

DiGirlamo also visited James Moretina's home
and spoke with him daily on the telephone. Id.

DiGirlamo and Simone had known each other
since childhood. They had participated in community sporting and
charity events together, and had spent time at one another's homes.
Id.

DiGirlamo had also prepared Tousa and his
wife's personal tax returns and had spent time in the Tousas'
home while doing so. Id.

In United States v. International Bhd.
of Teamsters, Chauffeurs, Warehousemen and Helpers of Am. (Adelstein),
998 F.2d 120 (2d Cir. 1993), Adelstein held the positions of Secretary-Treasurer
of IBT Local 813, President of IBT Local 1034, and Secretary-Treasurer
of the Executive Board of IBT Joint Council 16.

There was evidence that he had "decades-long
relationships with an entire cast of characters who were members
of organized crime'." Id. at 123-24 (quoting Independent
Administrator). Adelstein assisted Gambino family member James
Failla ("Failla") in the mob's control of both the garbage
industry and of IBT Local 813 in New York City. Id. at
122. He was an associate of the Gambino family and answered to
Failla. He and Failla often attended the same social affairs,
charity affairs, and funerals. Id. at 125.

In United States v. International Bhd.
of Teamsters, Chauffeurs, Warehousemen and Helpers of Am. (Yager),
761 F. Supp. 315 (S.D.N.Y. 1991), the Independent Administrator
prevented the appointment of Yager to the IBT's General Executive
Board since there was evidence that he had been seen with members
of the LCN. Id. at 320. Moreover, the LCN had a history
of influence over the IBT Central States Pension Fund, of which
Yager was an officer, and had once engaged in a scheme to bribe
a former United States Senator using pension fund assets. Id.
The Independent Administrator concluded that Yager knew of this,
yet did nothing to stop it. Id.

The GEB Attorney also cites Judge Edelstein's
statement in United States v. International Bhd. of Teamsters,
Chauffeurs, Warehousemen and Helpers of Am. (Cozza), 764 F.
Supp. 797, 813 (S.D.N.Y. 1991), that "there is no such thing
as a purposeful, yet innocent or non-reproachful association of
an Union leader and an underworld figure." The facts of that
case, however, are far different from those herein. There, Cozza
admitted that he knowingly associated with five members of the
Pittsburgh LCN. This association included daily visits with John S. LaRocca, who was the
Boss of the Pittsburgh family from 1956 until his death in 1984.
Id. at 806.

In a case brought under the Carpenters' Consent
Decree, United States v. District Council of New York City
(Fiorino), 941 F.Supp. 349 (S.D.N.Y. 1996), Fiorino knowingly
associated with two members of the Genovese family, Liborio Bellomo
and Ralph Coppola. Id. at 357. Although Bellomo was married
to Fiorino's sister, the Court found that their relationship went
beyond the ordinary contacts of family members. Id. at
368. For example, there were 372 telephone calls made in a ten
month period from Bellomo's home to Fiorino's beeper. Id. at 369.
Fiorino also admitted that he had met with Coppola on the street,
visited him at home, and spoke with him on the telephone. Id.

The contact alleged by the GEB Attorney herein
is of a far different character than that found in the above cases.
In this matter, there was no credible evidence presented to show
any contact between Patriarca, Jr. and Coia at any time except
for the joint defense meetings at Coia & Lepore.

Conclusions

1.The GEB Attorney has not proved by a
preponderance of the evidence that an ongoing social or business
relationship existed between Coia and Patriarca, Jr. which constituted barred conduct.

2.The IHO finds that the GEB Attorney has
not proved Charges I and III by a preponderance of the evidence.
As noted above, Charge II has been withdrawn.

Barred Conduct -- Permitting LCN Influence:
From in or about April, 1990 through 1994, ARTHUR A. COIA knowingly
permitted members and/or associates of the LCN to exercise control
or influence over the affairs of the Union, to wit: by his actions
and failures to act, he allowed officers of Local 66 who were
influenced and controlled by the LCN to remain in power, thereby
allowing the LCN to continue its control and influence over Local
66.

38

Charge V alleges:

Violation of Duty of Loyalty: From in or
about 1990 until in or about 1994, ARTHUR A. COIA violated the
obligation of undivided loyalty incumbent upon all members, officers,
and employees of LIUNA, including but not limited to those duties
set forth in 29 U.S.C. ?501(a) and the LIUNA Ethical Practices
Code, to wit: through his actions and failures to act, he did
not take adequate steps to investigate and remedy organized crime
corruption at Local 66, and he participated in a course of conduct
that permitted and facilitated the continuation of that corruption
during and after the time that LIUNA placed Local 66 under trusteeship
in 1990 through 1992.

Charge VI alleges:

Constitutional Duties of LIUNA Members: In
permitting the LCN to exercise influence over Union affairs, as
alleged more specifically above in Charge IV, ARTHUR A. COIA failed
to honor his obligation as a LIUNA member to refrain from interfering
with the proper conduct of LIUNA business, in violation of Article
III, Section 3(d) of the Uniform Local Union Constitution.

Introduction

In Charges IV through VI, the GEB Attorney
asserts that Coia failed to take adequate measures to ensure that
LCN influence was eradicated from LIUNA Local Union 66 ("Local
66") after he was appointed as the Hearings Panel Officer
to rule upon an emergency trusteeship for the Local.

Findings of Fact

1.Local 66 is located in Melville, New
York. See GEB Ex. 32.

2.From 1985 through December of 1989, the
following persons served as officers of Local 66:

Peter Vario ("Vario") Vice President of Local 66 and Administrator
of Local 66's Benefit Funds;

Benjamin DeLucia ("DeLucia")President;

Santo Ippolito ("Ippolito")Executive Board Member and Field Representative;

Frank Chimento ("Chimento")Executive Board Member;

James Abbatiello, Jr. ("Abbatiello,
Jr.") Executive Board member;

Michael LaBarbara, III ("LaBarbara,
III")Field Representative;

Gerald Losquadro ("Losquadro")Field Representative;

Bruno Leone, Jr. ("Leone")Field Representative.

See R. Ex. 120.

1.On December 12, 1988, a 51 count federal
indictment was returned against three officers of the Local
66 Executive Board ("the Board") -- Vario, LaBarbara,
Jr., and Abbatiello, Sr. -- charging them with using Local 66
to engage in a course of racketeering activity for the benefit
of the Luchese crime family. GEB Ex. 10.

2.At the January 26, 1989 Local 66 Board
meeting, the remaining members of the Board voted to pay for the
legal expenses incurred by Vario, LaBarbara, Jr., and Abbatiello,
Sr. in their defense against the indictment. GEB Ex. 9, Tab 23;
R. Ex. 110. In all, Local 66 would eventually pay approximately
$400,000 in legal expenses on their behalf. GEB Ex. 9, 11.

3.The Local's attorney, Jeffrey S. Dubin
("Dubin"), advised the Board that it was legal for the
Local to pay the attorneys' fees. Tr. 1100-01. This advice was
incorrect. Tr. 1237-38; GEB Ex. 41.

4.On December 14, 1989, LaBarbara, Jr. and
Abbatiello, Sr. resigned from the Board and, as severance
packages, the Local gave each a new Lincoln Town car. GEB Ex.
17-18 (resigning from posts), 21-23 (receiving automobiles from
Local). Vario was given a cash payment of $35,769.50 in lieu of
a car.(9) GEB Ex. 24, 25. Dubin had advised the Board that it
could make this cash award to Vario. GEB Ex. 9, Tab 28.

5.On September 26, 1989, LaBarbara, Jr. and
Abbatiello, Sr. pled guilty to various federal charges and, on
December 15, 1989, they were each sentenced to 14 months in prison,
two years probation, and fines of approximately $37,000. GEB Ex.
14, 19, 20. On March 29, 1990, Vario was convicted and sentenced
to 46 months in prison, three years probation, and a fine of $106,360.
GEB Ex. 30, 32.

6.On January 8, 1990, Samuel Caivano, the
Regional Manager in whose jurisdiction Local 66 was located,
wrote a letter to General President Angelo Fosco ("Fosco")
requesting that Local 66 be placed under trusteeship. GEB Ex.
26. Samuel Caivano said:

Because of circumstances surrounding the
conviction and incarceration of several key local union officials,
I strongly recommend that emergency trusteeship be placed over
Local Union 66, Melville, New York.

This Regional Office has been monitoring
the current situation at Local Union 66, and I believe that the
only way to guarantee quality representation for the membership
as well as restoring the integrity of the Local Union is through
the immediate imposition of emergency trusteeship.

Your immediate attention to this problem
would be appreciated.

Id.

1.On March 15, 1990, in response to Samuel
Caivano's recommendation, Fosco placed Local 66 under emergency
trusteeship pursuant to Article IX, Section 7 of the International Constitution which authorizes
the General President to do so when necessary to correct corruption
or financial malpractice, assure the performance of collective bargaining agreements, restore democratic
procedures, carry out the legitimate objects of the local union
or protect the organization as an institution. International Constitution,
Article IX, Section 7. See R. Ex. 31, 54, 58, 59.

2.In conformance with Article IX, Section
7, Fosco convened a Special Hearings Panel ("the Panel")
to determine if the emergency trusteeship over Local 66 was properly
imposed and if it should be continued. R. Ex. 60. Such a Panel
usually consisted of one or more International Vice Presidents
who acted as Hearing Officers. International Constitution, Article
VIII, Section 2(a-vii). They were assisted by one or more attorneys
from the LIUNA General Counsel's(10) office. Tr. 3584. Coia, who
was then the International General Secretary-Treasurer, was appointed to sit
as the sole member of the Local 66 Panel. Tr. 1175-76. Two attorneys
from the General Counsel's office, David Elbaor ("Elbaor")
and Ted Green ("Green"), accompanied him to the hearing
See id.

3.As the Hearing Officer assigned to the
Local 66 Panel, Coia's sole duty was to determine whether the
trusteeship was properly imposed and whether a good faith basis
existed to continue it. See International Constitution, Article
IX, Section 2(a-vii), Section 7. See id. Article X, Section 4.

4.The hearing was convened on April 10, 1990
and evidence was presented to the Panel regarding financial
malpractice and corruption at Local 66. See generally R. Ex. 63.
An audit report revealed that approximately $400,000 of the Local's
funds had been spent on legal fees for Vario, LaBarbara, Jr.,
and Abbatiello, Sr. See id. at 4, 6, 39.

5.As was the practice at that time, the Panel's
report was drafted by the attorneys who accompanied
Coia to the hearing. Tr. 1431, 3585, 4587, 4590. Coia approved
the report, signed it, and submitted it to the GEB for its approval.
GEB Ex. 34. The report made the following findings:

1. In December, 1989, the Business Manager/Secretary-Treasurer,
and the Recording Secretary/Assistant Business Manager of the
Local Union pled guilty to indictments alleging numerous violations
of RICO and Section 302 of the Taft-Hartley involving the taking
of money from contractors for personal benefit. The Business Manager
and Recording Secretary/Assistant Business Manager immediately
resigned from office. In March, 1990, the Vice President, who
was also an Organizer of the Local Union and the Administrator
of the Local Union Funds, was convicted for his part in the same
course of conduct.

2. The Local Union has paid the legal expenses
of all three officers.

3. The former Vice President and Fund Administrator
has interfered with the conduct of Local Union business following
the resignation of the Business Manager/Secretary-Treasurer and
the Recording Secretary/Assistant Business Manager in December,
1989 up to and beyond the point at which his own trial was conducted.

4. The trustee has taken various steps to
rectify the situation. A full audit of Local Union affairs is
being conducted and appropriate remedial action will be taken.
Through its trustees, the Local Union will see to it that the
funds not retain, as an employee or agent, any person disqualified
by ERISA. Other action is being taken to see that appropriate
collective bargaining procedures are restored.

5. Under the circumstances it is clear that
the Local Union was facing an emergency condition when the General
President imposed trusteeship on [March 15], 1990.

Id.

1.The Panel report recommended "[t]hat
the General President's decision to impose an emergency trusteeship
be ratified and that a continuation of the trusteeship be authorized."
GEB Ex. 34. The GEB adopted the recommendation. GEB Ex. 39.

2.At the time, it was the accepted policy
and practice of the International Union to appoint the Regional
Manager as the trustee of a local placed in receivership, or to
defer to the Regional Manager's recommendation when selecting
an alternative trustee. Tr. 3667-68. Regional Managers, as a general
rule, were and still are, very protective of their regions and
the prerogatives and procedures that go along with their position.
Tr. 3519-23, 3819-23.

3.Daniel Caivano was appointed the interim
trustee upon the recommendation of his uncle, Samuel Caivano,
the Regional Manager. GEB Ex. 31; R. Ex. 57. As Local 66's trustee,
Daniel Caivano was "authorized to take full charge of the
affairs of the [Local] . . . and to take such other action as,
in [his] . . . judgement, [was] necessary for the preservation
of the [Local] and its interests." See International Constitution, Article IX, Section 7. Only General President Fosco was constitutionally authorized to remove him from his post.
Id.

4.Daniel Caivano exercised his authority
as trustee to appoint DeLucia and LaBarbara, III as deputy trustees
with power only to co-sign the checks Daniel Caivano wrote for
Local 66. R. Ex. 103 at 83. He also appointed DeLucia, LaBarbara,
III, Losquadro, and himself as trustees of the Local 66 Funds,
while Abbatiello, Jr. became the Administrator of the Funds.(11)
Id. at 72-73, 75-76.

5.Upon learning of these appointments, Coia
admonished Samuel Caivano and Fosco regarding the negative
perception which arose from retaining the sons of the convicted
felons as Local 66 officials. Tr. 4931-33, 5313. Coia testified
that he and Samuel Caivano had an argument on this subject but
that Samuel Caivano persisted by stating, "[T]he sins of
the fathers should not be put on to the kids." Tr. 4933.

6.Daniel Caivano said he appointed Abbatiello,
Jr. and LaBarbara, III to positions of authority at Local 66 because
they had never been accused of engaging in any wrongdoing. R.
Ex. 103 at 95.

7.In his opening statement, the GEB Attorney
stated that the handling of the Local 66 matter was a "museum
quality example of how local unions were corrupted and controlled
by organized crime and how the international union sustained that
corruption through the illusion of intervention." Tr. 22-23.
He argued that Coia, "had a legal and ethical duty to make
every effort to protect the members of Local 66 from continued
corruption, and he failed to do so." GEB Resp. Br. at 7.

8.The GEB Attorney contends that Coia violated
his fiduciary duty by not doing more to eradicate LCN influence
from Local 66 after he sat as the Hearing Officer at the emergency
trusteeship hearing. The GEB Attorney's argument fails to recognize
the institutional makeup of the International Union at that time,
prior to the adoption of the EDP.

Pre-Reform Trusteeship Procedure

1.Prior to the adoption of the EDP, the International
Union was governed solely by federal law and the International
and Local Union Constitutions. At the time, the International
Union's control over the local unions was limited to its power
to place the local union into trusteeship pursuant to 29 U.S.C.
?462.

2.Article IX, Section 7 of the International
Constitution conformed to 29 U.S.C. ?462 and a trusteeship could
be imposed on a local union to correct corruption or financial
malpractice, assure the performance of collective bargaining agreements
or other duties of a bargaining representative, restore democratic
procedures, carry out the legitimate objects of the local union
or protect the organization as an institution. International Constitution,
Article IX, Section 7.

3.A trusteeship is presumed valid for 18
months. 29 U.S.C. ?464(c).

4.Aside from its statutory and constitutional
authority to impose a trusteeship, the International Union had
no control over the local unions.

5.Historically, a parent labor organization
and its affiliates do not always share common interests. The parent
organization is limited by federal law and its constitution when
exercising its authority over a subordinate affiliate. See generally
Laborers' Int'l Union of N. Am. v. National Post Office Mail Handlers,
Watchmen, Messengers and Group Leaders Div. of the Laborers' Int'l
Union of N. Am., 880 F.2d 1388 (D.C. Cir. 1989). The relationship
between an international union and its local unions cannot be
compared to the business arena where the head organization controls
subordinate entities, but is more analogous the United States
Government's concept of our nation's federalism and separation
of powers. See Ann B. Whitley, Note, Collective Institutional
Guilt: The Emergence of International Unions' RICO Liability for
Local Union Crimes, 21 Am. J. Crim. L. 291 (1994).

6.The GEB Attorney has based Charges IV through
VI to a great extent on the fact that the sons of the convicted
officers remained in positions of power after the continuation
of the trusteeship, and Coia did nothing to remove them.

7.As the Hearing Officer, Coia had no authority
to participate in the operation of the trusteeship and had no
power to appoint or even recommend a trustee for Local 66. See
generally International Constitution, Article IX, Section 7 (discussing
process of appointing trustee). Unlike a judicial trusteeship,
where the judge has continuing oversight, the Hearing Officer
merely confirms or denies the need for the trusteeship. Id. The
General President then assumes the role of the judge and supervises
the trustee. The Hearing Officer is similar to a Special Hearing
Master whose job is to find facts with respect to very specifically
defined issues.

8.Coia's only constitutional role as the
Hearing Officer at Local 66 was to determine whether the emergency
trusteeship should be continued. He did all that he was legally
required to do in this position. He could not appoint or remove
the trustee and he had no legal authority over the actions of
the trustee; this power was reserved for the General President
who, at the relevant time herein, was Fosco.

9.Even today, the IHO, when sitting as the
Hearing Officer in a trusteeship proceeding pursuant to his powers
under the EDP, cannot choose, remove, or intercede in the activities
of a trustee once that person has been appointed. The IHO has
informally recommended that certain persons be appointed or removed
as trustees without success. It is unreasonable to think that
Coia, in the International Union structure as it existed prior
to the enactment of the EDP, could have constitutionally or legally
done more.

10.The GEB Attorney's argument regarding
the supervision of the trusteeship is more properly directed at
General President Fosco and his supervision of the trustee, Daniel
Caivano. Coia did not become LIUNA's General President until February
of 1993, long after the Local 66 trusteeship had ended. At that
time, a local union was autonomous and the International Officers
had very limited power over it once a trusteeship had ended.

11.The Regional Manager's ability to dictate
that the two sons remain as deputy trustees was a reflection of
the ineffective LIUNA organization that existed prior to the reform.
Today, such a decision would have been overridden by the IG or
the GEB Attorney, but Coia cannot now be held legally responsible
for Samuel Caivano's actions.

The Local 66 Bonding Claim

1.As a defense to Charges IV and V -- permitting
the LCN to influence Local 66 and failing to eradicate
LCN corruption at Local 66 -- Coia placed over 30 documents
into the record to show that efforts were made to protect the
interests of the Local by filing a bonding claim with Eberts &
Harrison, Inc., the International Union's bonding company,
to recover the $416,078.79 in attorneys' fees paid to the
three indicted, and later convicted, officers' attorneys. See
R. Ex. 68-100.

3.In February of 1993, Coia became the General
President and Norwood became the General Secretary-Treasurer
of LIUNA. The final settlement of the bonding claim was handled
by Norwood in his capacity as the General Secretary-Treasurer
in April of 1994, four years after Coia sat as Hearing Officer
at Local 66.

4.The evidence of the bonding claim, and
the rebuttal thereto, are irrelevant to the Local 66 charges and
will not be discussed further.

Conclusions

1.After Coia made his recommendation to
the GEB to continue the trusteeship at Local 66, he had no further
constitutional duties that permitted or required him to appoint
the trustee(s) or oversee the operation of the trusteeship.

2.The evidence in the record does not prove
that Coia committed "barred conduct" in violation of
the EDP by allowing the LCN to continue its control and influence
over Local 66 after he recommended the continuation of the trusteeship
in April of 1990.

3.The GEB Attorney does not offer any suggestions
as to how Coia breached his fiduciary duty, except to assert that
he could have done more. The IHO finds that Coia did not breach
his fiduciary duty during or after the Local 66 trusteeship hearing.

4.The GEB Attorney has failed to prove that
Coia interfered with the proper conduct of Local 66's union business
after he recommended the continuation of the trusteeship
in April of 1990.

5.The IHO finds that the GEB Attorney has
not proven Charges IV through VI by a preponderance of the evidence.

From in or about April 1990 until in or about
1992, ARTHUR A. COIA knowingly permitted members and/or associates
of the LCN to exercise control or influence over the affairs of
the Union, to wit: through Coia's actions, LIUNA supported the
defense of LCN members and associates who had corrupted LIUNA
by authorizing and approving the expenditure of substantial Union
funds to attack the credibility of Ronald Fino, but not to determine
in good faith the truth or falsity of Fino's allegations, when
Coia knew or should have known that at least some of Fino's allegations
of LCN influence over LIUNA were credible and true.

50

Charge VIII alleges:

Violation of Duty of Loyalty:

From in or about 1990 until in or about 1992,
ARTHUR A. COIA violated the obligation of undivided loyalty incumbent
upon all members, officers, and employees of LIUNA, including
but not limited to those duties set forth in 29 U.S.C. ?501(a)
and the LIUNA Ethical Practices Code, to wit: he authorized and
approved the expenditure of substantial Union funds for legal
aid investigative work which benefited LCN members and associates,
to the detriment of LIUNA and its members, and failed to authorize
or approve the use of Union resources to determine in good faith
the truth or falsity of Fino's allegations of LCN control over
LIUNA.

Charges IX alleges:

Constitutional Duties of LIUNA Members:
In permitting the LCN to exercise influence over Union affairs
as alleged more specifically above in Charge VII, ARTHUR A. COIA
failed to honor his obligation as a LIUNA member to refrain from
interfering with the proper conduct of LIUNA business, in violation
of Article III, Section 3(d) of the Uniform Local Union Constitution.

Introduction

Initially, the GEB Attorney charged Coia
with permitting the LCN to influence LIUNA by authorizing the
expenditure of International Union funds to attack the credibility
of Ronald Fino ("Fino"), the former Business Manager
of LIUNA Local Union 210 ("Local 210"), after the media
reported that Fino had been exposed as an FBI informant and was
alleging LCN infiltration at the highest levels of LIUNA. The
GEB Attorney contended that the International Union's attorneys
were deployed by Coia to investigate Fino for the sole purpose
of discrediting him and allowing their information to be shared
with attorneys representing known LCN members. Tr. 43-45. Furthermore,
he charged Coia with failing to authorize the expenditure of Union
funds to determine the veracity of Fino's allegations which had
surfaced in media reports, in his testimony in a criminal proceeding
in New York, and in FBI 302 reports obtained by the International
Union. See Charges VII through IX, supra at 47-48.

In his case in chief, the GEB Attorney presented
evidence that only one investigation, conducted by attorney Anthony
Traini ("Traini"), took place after Fino surfaced as
an FBI informant and this investigation was designed solely to
impugn Fino. He asserted that the International Union should have
conducted an investigation into the substance, truth or falsity
of Fino's allegations. The defense then countered and presented
substantial evidence that an extensive investigation, or "legal
audit," had in fact been conducted by the LIUNA General Counsel's
Office into the substance of Fino's allegations. See R. Ex. 122,
125-26, 128, 130, 135-41, 143-63, 168-73

In his post-hearing briefs, the GEB Attorney
abandoned his original position and argued that Coia was more
concerned with following the investigation into Fino's credibility
than the investigation conducted by the General Counsel. GEB Br.
at 95, 100.

Findings of Fact

Fino's Allegations and LIUNA's Response
Thereto

1.Fino served as the Business Manager of
Local 210, in Buffalo, New York from 1973 until he retired in
1988. Tr. 2316 (undertaking Business Manager position), Tr. 2322
(retiring in 1988).

2.In February of 1989, the Buffalo news media
reported that Fino had been an FBI informant during his entire
15 years as the Business Manager of Local 210 and had provided
the FBI with substantial information of LCN infiltration of LIUNA.
Tr. 1627-28. The media further reported that Fino provided information
to the FBI that the ." . . Mafia controlled the parent union's
operation across the country." R. Ex. 178 (Michael Beebe,
Fino Goes Into Hiding, Says He Had Been FBI Informer, The
Buffalo News, February 2, 1989, at A1.). See also R. Ex. 181 (Michael
Beebe, Fino's Double Life Recalls Father's Warning on Mob,
The Buffalo News, April 17, 1989 at A1)(reporting familial involvement of Fino
with mob), R. Ex. 182 (Dan Harback, Masked FBI Agent Acts
as Decoy as Threatened Fino Enters Court, The Buffalo News,
March 23, 1989 at A1)(reporting Fino's FBI contract and mob threats
against Fino).

3.LIUNA's General Counsel was aware that
the federal government was conducting an aggressive program to
rid labor unions of LCN corruption using the civil provisions
of the Racketeer Influence and Corrupt Organizations Act ("RICO").
Tr. 3407-08. During the late 1980s and early 1990s, for example,
the DOJ embarked upon a campaign of filing civil RICO suits against
numerous international and local labor unions, with the object
of placing them under government trusteeship. At the time the
Fino allegations came to light, this movement was well underway.
The DOJ had been successful in placing IBT Local 560 in New Jersey
under trusteeship. United States v. Local 560, Int'l Bhd. of
Teamsters, Chauffeurs, Warehousemen and Helpers of Am., 581
F. Supp. 279 (D. N.J. 1984). The DOJ also filed a civil RICO complaint
against the International Brotherhood of Teamsters on June 28,
1988 and, after a year of intense litigation, entered into a voluntary
Consent Decree with the international union in March of 1989,
placing it under trusteeship. See United States v. International
Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of Am.,
831 F. Supp. 278 (S.D.N.Y. 1993). The trusteeship over Local 560
was lifted in February of 1999; the trusteeship over the Teamsters
remains in place. Similar suits were also filed against the Roofers
Union, United States v. Local 30, United Slate, Tile, and Composition
Roofers Damp and Waterproof Workers Ass'n, 686 F. Supp. 1139
(E.D. Pa. 1988); the Carpenters Union, United States v. District
Council of New York and Vicinity of the United Brotherhood of
Carpenters & Joiners of America, 778 F. Supp. 738 (S.D.N.Y.
1991); and the International Longshoremens' Association, United
States v. Local 1804-1 International Longshoremens' Ass'n,
812 F. Supp. 1303 (S.D.N.Y. 1993). Each of these suits resulted
in some form of trusteeship over the defendant union.

4.Also relevant at this time was LIUNA's
experience in 1981 in what is described as the Hauser case wherein
Coia, his father, Lepore, Jr. and Patriarca Sr. were indicted
for allegedly receiving kickbacks in return for awarding a union
contract to a Florida insurance company operated by Joseph Hauser.
United States v. Coia, 81-417-King (S.D. Fla. 1984.) See
also R. Ex. 124. Hauser surfaced in the early 1980s as an FBI
government witness and had testified in a number of federal prosecutions,
including United States v. Accardo, No. 81-23-CR-JWK, (S.D.
Fla. June 7, 1982), which involved the receipt of kickbacks from
a LIUNA welfare fund. R. Ex. 123 at 1 n.1. In the case involving
Coia, the court dismissed the charges. R. Ex. 124.

5.In response to Fino's allegations and in
anticipation of possible litigation filed by the DOJ, LIUNA
began two separate investigations in April of 1990. Elbaor, on
behalf of LIUNA's General Counsel, began an inquiry to determine
the substance, truth or falsity of Fino's allegations and Traini
commenced an investigation into Fino's background and credibility
for use as future impeachment material. These two investigations
ran simultaneously but on separate tracks, and will be discussed
seriatim.

Elbaor's Investigation

1.During 1990 and 1991, the General Counsel
of LIUNA was Robert Connerton of the Connerton firm. Tr. 1631.
Elbaor, an experienced labor lawyer and former prosecutor,
was employed by the Connerton firm. Tr. 2981.

2.On April 5, 1990, Elbaor held a telephone
conference with Harold Boreanaz ("Boreanaz"), an
attorney in Buffalo, New York. R. Ex. 122 at 1. Boreanaz represented
Joseph Rosato ("Rosato"), a steward at Local 210, who
was a defendant in a federal criminal case in Buffalo. Tr. 1631.
Fino was scheduled to be a witness against Rosato.(12)
Boreanaz told Elbaor that he would be willing to supply the International
Union with copies of eighteen FBI 302s on Fino, in exchange for
assistance from the International Union in investigating Fino.
R. Ex. 122 at 1.

3.As reflected in his memorandum to Connerton
on April 6, 1990, Elbaor emphasized to Boreanaz that the International
Union was his client and he would only participate in the proposed
sharing of information if it would serve the institutional interests
of the International Union. R. Ex. 122 at 2.

4.It should be noted that FBI 302s are not
public documents of the FBI or the DOJ. Pursuant to 18 U.S.C.
?3500, they are only given to defense counsel in criminal cases
where a witness, whose interview is the subject of the 302, testifies
at trial. Since Fino was under FBI protection and unavailable,
the only legitimate means of obtaining his allegations were from
the 302s which were provided to defense counsel in cases where
Fino was scheduled to testify. Moreover, the 302s released to
these defense counsel were generally limited to the subject matter
of that particular trial. Id.

5.Elbaor recommended to Connerton that they
meet with Boreanaz for two reasons: (1) "Fino may be a resurrected
and improved Joe Hauser," and (2) "his [Fino's] accusations
may be the springboard for a RICO civil action against LIUNA,
or its Regions, or its District Councils." R. Ex. 122 at
3.

6.On April 10, 1990, Connerton and Elbaor
met with Boreanaz in Buffalo and obtained all of the Fino 302s
that Boreanaz had in his possession. R. Ex. 125. Boreanaz told
Elbaor and Connerton that he had obtained the 302s from Paul Cambria
("Cambria"), another criminal defense attorney in Buffalo,
who had received them from a prosecutor during pre-trial discovery
in an unrelated case. Id.

7.On April 12, 1990, Elbaor sent a memorandum
to Coia and Fosco with copies of Fino's FBI 302s.(13) R. Ex. 126.

8.After Elbaor received the Fino 302s, he
recommended to Connerton that the General Counsel's office
conduct a "legal audit of the International [to] see what
we can learn." Tr. 3047. Elbaor's task was to ." . .
identify what [Fino's] allegations were, [and] see which ones
were capable of verification." Id.

9.A "legal audit," also known as
an internal investigation, is a recognized concept in which a
corporation, partnership, labor union or other business entity
utilizes a lawyer or law firm to investigate internal matters
under the protection of the attorney client privilege. See
e.g., Corporate internal investigations, Webb, Tarun, Molo,
Law Journal Seminar Press (1990); Stephen F. Black, Internal Corporate
Investigations, Business Law Monographs Vol. C5, Matthew Bender
Co., Inc. (1998). The attorney's task is to investigate the matter
in question and report to the entity's officers with findings
and legal advice. Id. A substantial body of case law has developed
involving the techniques and use of this procedure, which is widely
employed by corporations. Id.

10.A legal audit was an acceptable tool for
Elbaor to utilize when conducting his investigation into Fino's
allegations.

11.Elbaor was well qualified to conduct the
legal audit into Fino's allegations. From 1976 through October
of 1980, Elbaor worked at DOJ headquarters in Washington, D.C.
as a trial attorney in the General Crimes Section, and
he also served on temporary duty for a six month period as a Special
Assistant in the U.S. Attorney's office in the Eastern District
of Virginia. Tr. 2983. In addition, he was assigned to the Labor
Unit of the Criminal Division where he investigated and prosecuted
both labor union and ERISA cases. Tr. 2984. Later, he joined the
Organized Crime and Racketeering Section of the Criminal Division
in a special unit known as Strike Force 18, which specialized
in RICO investigations, including those involving labor racketeering.
Tr. 2985. He joined the Connerton firm in 1980 where he became
a partner and, in 1994, began his own practice. Tr. 2981-82. Currently,
he works on civil RICO litigation matters and bonding claims for
LIUNA. 2986-87.

12.Elbaor reviewed the FBI 302s and compiled
a catalogue of the allegations made by Fino therein. GEB Ex. 72,
121; R. Ex. 130.

13.Elbaor monitored Fino's testimony during
the trial of John M. Riggi, John J. Riggi, Vincent Riggi, Salvatore
Timpani and Girolamo Palermo. Tr. 3367; R. Ex. 134. John
M. Riggi was a LIUNA local union officer who had been charged
with various counts of labor racketeering. Id.;
GEB Ex. 114. Elbaor also read the transcript of Fino's March 7, 1990
testimony in U.S. v. Guarnieri
before Judge McAvoy in the Northern District of New York. R. Ex. 137.

14.In a series of memoranda, Elbaor detailed
Fino's testimony during the Guarnieri and Riggi trials,
as well as his testimony before a Grand Jury in Newark, New Jersey.
See R. Ex. 134-138.

15.On March 5, 1991, after completing his
investigation of the Fino allegations that he determined were
capable of verification, Elbaor submitted his audit report to
the GEB for its review. R. Ex. 173. In the introductory letter
accompanying the report, Elbaor stated,

With respect to the methodology of the audit,
its intent was not to destroy Fino's overall credibility, but
to neutrally examine his allegations against interviews and records
generated contemporaneously with events in question. There proved
in this process sufficient information to justify serious doubt
and critical enquiry about Fino's credibility, and his motivations
for making his allegations in the first place. But delving into
that, and reporting on it, would have required an inordinate amount
of time and resources, and would have required a far lengthier
audit having a conclusion probably identical to that readily extrapolated
from the present audit report.

The audit as embodied in its report focuses
on allegations affecting the International Union, not its affiliate
Local 210, nor other affiliates or businesses.

Id. Elbaor
was of the opinion that Fino's testimony was broad, vague and
contained few verifiable details regarding his contacts with individuals
in the labor union. R. Ex. 134 at 2. The record reflects that
neither Coia nor anyone else ever attempted to impede or improperly
influence Elbaor's work.

1.The IHO finds that a legal audit of Fino's
allegations was conducted by LIUNA and the GEB Attorney's assertion
that an investigation of the substance, truth or falsity of Fino's
allegations was not conducted is contradicted by the record.

Traini's Investigation

1.Traini is an attorney from New England
whose practice is concentrated in the area of criminal defense.
Tr. 4645. He participated on the defense team which successfully
represented both Coia and Coia, Sr. in the Hauser case in Florida
in the early 1980s. Tr. 5192.

2.The International Union, on Coia's recommendation,
employed Traini to conduct an investigation into Fino's
background for the purpose of defending the International Union
in the event the DOJ used him as a witness to prosecute a civil
RICO case against it. Tr. 2271, 5188, 5192-93.

3.Philip D. Smith ("Smith") testified
herein on April 29, 1998. Tr. 2268. Smith, an investigator with
the office of LIUNA's IG, interviewed Traini in April of 1997.
Tr. 2270. Traini told Smith that Coia assigned him the duty of
investigating Fino in order to obtain background material which
could be used to impeach him in the event that he ever testified
against the International Union or its officials. Tr. 2271.

4.Traini noted that, in light of Fino's allegations
against the International Union and "of the government's
long history of attempting to indict and convict officers of the
Laborer's Union and to take control of the International, . .
. a need may arise in the future to question the believability
of Fino before a jury, particularly in the context of a civil
RICO case." R. Ex. 183 at 9. See also GEB Ex. 92 He undertook
his investigation in an ." . . attempt to discover facts
and circumstances which might be relevant to undermining Fino's
credibility." R. Ex. 183 at 9. Traini characterized "Fino
[as] a prime weapon in the government's arsenal against the union."
Id.

5.Traini examined the potential credibility
of a key prosecution witness, a task that criminal defense attorneys
are hired to do.

6.In light of the evidence of Elbaor's investigation,
it appears that Traini was providing LIUNA with only one branch
of dual investigations and was preparing for anticipated litigation.
There is no evidence that Traini was asked to destroy evidence
or create false testimony.

7.The GEB Attorney's argument that Traini
was not impartial, was paid too much money, or that Coia did not
render the same level of assistance to Elbaor and did not disclose
the details of Traini's investigation to Elbaor, carry little
weight in the factual determination of Charges VII, VIII, and
IX, in view of the dual investigations and Traini's role as a
possible defense counsel.

Coia's Responsibility to Investigate
Fino's Allegations

1.The investigation of Fino's allegations
was conducted under the auspices of LIUNA's General Counsel. See
generally R. Ex. 173.

2.Article IX, Section 19 of the International
Constitution sets forth the duties of the General Counsel and
states:

The General President, with the approval
of the General Executive Board, shall retain the services of a
General Counsel and such Associate Counsel as may be deemed necessary
and proper.

The General Counsel shall perform his duties
under the supervision and direction of the General President
with the approval of the General Executive Board.

International Constitution, Article IX, Section
19 (emphasis added).

1.At the time Fino's allegations became
public, Fosco was the International General President and, pursuant
to Article IX, Section 19 of the International Constitution, it
was Fosco's duty to direct and supervise the General Counsel.

2.Coia, along with the other members of the
GEB, only had the authority and responsibility to approve Fosco's
direction and supervision of the General Counsel. International
Constitution, Article IX, Section 19.

3.As the record reflects, Coia, in his capacity
as General Secretary-Treasurer, along with Fosco and
Connerton, approved the legal bills from Connerton's firm regarding
the Fino investigation. See GEB Ex. 97, 98, 116; R.
Ex. 127-29, 131 33, 141,146,158-58A, 163-65, 167, 170-71.

4.Coia cannot be faulted for failing to monitor
or direct an investigation of Fino or his allegations because
he was not constitutionally required to do so.

The Fino "Information Swap"

1.The GEB Attorney contends that Coia permitted
union resources to be used in an "information swap"
with attorneys representing LCN members when, as General Secretary-Treasurer,
he authorized the payment of legal fees to Elbaor and Traini for
gathering the information on Fino which was allegedly shared in
the "swap." Tr. 45-46.

2.There is no indication Elbaor supplied
Boreanaz or any other attorney in Buffalo with anything other
than public documents or material. Elbaor testified that he gave
"very little" information to the attorneys in Buffalo.
Tr. 3360. No confidential or internal union information was ever
exchanged. See R. Ex. 194. The best source of Fino's allegations
at the time were the Fino 302s, which, as discussed above, were
obtainable only from the defense counsel in cases where Fino was
to testify. Technically, defense counsel are not permitted to
share 302s with persons not associated with the litigation wherein
they were originally surrendered by the DOJ.

3.The GEB Attorney's assertion that Traini
"shared investigative information with one member of a family
whom Fino had identified as being involved in LCN corruption"
is not supported by the evidence. GEB Resp. Br. at 23. In support
of this contention, the GEB Attorney cites a letter from Traini
to attorney Lawrence P. Giardina dated August 23, 1990, wherein
Traini thanked Giardina for his assistance in Buffalo. GEB Ex.
94; see also GEB Br. at 96. This hardly establishes that Traini
"shared investigative information" with Giardina. Also,
an addendum supplied by the GEB Attorney to his Exhibit 94 specifically
states that "there is no known information to indicate that
Lawrence P. Giardina(14) is connected to any of the LCN families."
GEB Ex. 94.

4.The IHO finds that there was no impropriety
with regard to Traini's contact with Giardina or anyone else.

Conclusions

1.The record does not support the GEB Attorney's
allegation in Charge VII that Coia allowed the LCN to influence
the affairs of the Union by spending the Union's funds to attack
Fino's credibility, disseminating this information to LCN defense
attorneys, and failing to investigate the veracity of Fino's allegations.

2.The GEB Attorney's argument that Coia breached
his fiduciary duty pursuant to 29 U.S.C. ?501(a) and the EPC by
not authorizing union funds to determine the truth or falsity
of Fino's claims is contradicted by the General Counsel's investigation.
It is apparent that a substantial amount of funds were expended
in determining the veracity of Fino's allegations and, therefore,
Coia did not breach his fiduciary duty under ?501(a).

3.Coia had neither the authority nor the
duty to control Elbaor's investigation; that responsibility was
borne solely by the International General President -- Angelo
Fosco. See International Constitution, Article IX, Section 19.
Coia's conduct regarding the investigations of both Traini and
Elbaor was proper and he fully satisfied his duties as the General
Secretary-Treasurer.

4.The allegation in Charge IX -- Coia's failure
to honor his obligation to refrain from interfering with
the proper conduct of union business -- is not supported by record.
There is no evidence that Coia interfered in any way with the
course of Elbaor's investigation, or that his recommendation that
LIUNA hire Traini interfered with the proper conduct of union
business. As such, the GEB Attorney has failed to prove a violation
of Article III, Section 3(d) of the Uniform Local Union Constitution.

5.The IHO finds that the GEB Attorney has
not proven Charges VII through IX by a preponderance of the evidence.

Barred Conduct -- Permitting the LCN to
Exercise Influence Over Union Affairs:
From 1993 to 1995, ARTHUR A COIA permitted the LCN to exercise
control or influence over Union affairs, to wit: COIA appointed
John Serpico to be Chairman of the GEB Hearings Panels and permitted
Serpico to act as the Union's chief judicial officer, knowing
that Serpico was an instrument of organized crime influence over
LIUNA, in violation of the barred conduct provisions of the EPC
and EDP.

64

Charge XI alleges:

Violation of Duty of Loyalty: From in or
about 1993 until in or about 1995, ARTHUR A. COIA violated the
obligation of undivided loyalty incumbent upon all members, officers,
and employees of LIUNA, including but not limited to those duties
set forth in 29 U.S.C. ?501(a) and the LIUNA Ethical Practices
Code, to wit: as LIUNA's General President, he appointed John
Serpico to serve as Chairman of the GEB Hearings Panels, and authorized
the expenditure of Union funds to increase Serpico's annual International
salary by more than $100,000, knowing that Serpico was an instrument
of organized crime influence over LIUNA.

Charge XII alleges:

Barred Conduct -- Knowing Association:
From in or aournd the latter part of 1992 until 1995, ARTHUR A.
COIA knowingly associated with LCN members and associates, including
John Serpico, in violation of the barred conduct provisions of
the EDP and EPC.

Charge XIII alleges:

Constitutional Duties of LIUNA Members: In
permitting the LCN to exercise influence over Union affairs, as
alleged more specifically above in Charge X, and in knowingly
associating with LCN members and associates, as alleged more specifically
above in Charge XII, ARTHUR A. COIA failed to honor his obligation
as a LIUNA member to refrain from interfering with the proper
conduct of LIUNA business, in violation of Article III, Section
3(d) of the Uniform Local Union Constitution.

Introduction

The GEB Attorney charges that Coia permitted
the LCN to exercise influence over LIUNA by appointing John Serpico
("Serpico") to be the chief judicial officer of LIUNA
in February of 1993 and that Coia associated with organized crime
associates from 1992 through 1995.

In order to understand these charges, a recitation
of the events surrounding Coia becoming General Secretary-Treasurer,
his ascent to the General Presidency and ultimately his suspension
of Serpico must be examined. The facts will be set out below in
detail.

Findings of Fact

Coia's Early Contacts with Serpico

1.In 1988, Coia was the Regional Manager
of the New England and eastern Canada regions. Tr. 4874.

2.In late December of 1988 or early January
of 1989, Coia began seeking support from the GEB members to succeed
his father, who was ill, as LIUNA's General Secretary-Treasurer.
Tr. 5159; R. Ex. 387 at 1061. He met with General President Fosco
at LIUNA headquarters to discuss the possibility of him succeeding
his father. R. Ex. 387 at 1061-62. Fosco directed him to discuss
the matter with Serpico who, at that time, was the Assistant to
the General President and an International Vice President from
Chicago. Id. at 1062-64; R. Ex. 328 at 396. Curiously, although
Serpico held the position of Assistant to the General President,
there was no public acknowledgment of Serpico holding this post.
Tr. 3656-58, 5340-42.

3.Coia contacted Serpico and agreed to meet
with him in Chicago. Tr. 5160; R. Ex. 387 at 1064.

4.When Coia arrived at Chicago's O'Hare Airport,
Serpico led him to a small coffee shop inside the terminal and
introduced him to Vincent Solano ("Solano"), whom Coia
knew to be either the President or Business Manager of one of
LIUNA's large Chicago local unions.(15) Tr. 5160-61; R. Ex. 387
at 1066-71. Solano told Coia to sit with him and directed Serpico
to go to another area of the coffee shop. Id. at 1066. Solano
then acknowledged that Coia could become the next LIUNA General
Secretary-Treasurer, but told Coia, "I want you to understand this - that John Serpico will be the next
General President of this union. He pounded on the table and pointed
over [to Serpico]. . . . we're grooming that man there to be the
next General President." Id. at 1007. Solano then concluded
the conversation, Serpico returned, and Coia returned to Rhode
Island on the next flight.(16) Id. at 1068-69.

5.According to the LIUNA Constitution, when
a vacancy occurs on the GEB, or in the two General Officer positions,
that vacancy is filled by the GEB. International Constitution,
Article XI, Section 5.

6.Coia was elected the General Secretary-Treasurer
of LIUNA in February of 1989 by the GEB. R. Ex. 387 at 1073.

Coia's Ascension to the Office of the
General President

1.Angelo Fosco was from Chicago, as was his
father who preceded him as General President. See Chicago District
Council, IHO 97-30T at 49 ?80. The record is clear from statements
made by Fosco to others that he felt compelled to comply with
the dictates of persons he characterized as the "guys in
Chicago," including their demand that he support Serpico's
candidacy to succeed him as General President when he retired.
R. Ex. 328 at 355, 369.

2.In early 1992, Fosco began to "casually"
discuss retiring as General President. R. Ex. 387 at 1083, 1086.
Coia testified during Serpico's disciplinary hearing in May of
1995 that Fosco's decision to retire was based on the fact that
his LCN benefactor in Chicago, Vincent Solano, had recently died
and, as a result, he had "no one to turn to." R. Ex.
387 at 1088. Coia testified that he understood this to mean "that
. . . someone else was calling the shots, [whom Fosco] did not
have a friendly relationship with." R. Ex. 387 at 1089.

3.Carl Booker ("Booker"), who at
the time of the hearing was an International Vice President and
Assistant to the General President(17), attempted to dissuade
Fosco from endorsing Serpico for the General Presidency on at
least a dozen occasions. R. Ex. 328 at 376; Tr. 3505. Booker told
Fosco that Coia was more qualified for the job, but Fosco told
him that Serpico would be nominated for the General Presidency
because that was what the guys in Chicago wanted. R. Ex. 328 at
374-75.

4.During this same time period, Fosco told
his secretary, Mary Devella ("Devella"), that he was
going to retire and Serpico would replace him as General President.
R. Ex. 387 at 1086. Devella became extremely upset upon learning
this information. Id. at 1088. When Coia was apprised of this,
he confronted Fosco and, in his words, "yelled" at him,
stating "[Y]ou know the problems that this union has had
in the past . . . how can you allow, even think of bringing [in]
John Serpico and replacing you in this position?" Id. at
1087-88. Coia requested that Fosco stay on as General President
and offered to assume the responsibilities of the office for him.
Id. Coia warned Fosco that if Serpico did become the General President,
he would resign and "take the key people back to New England
with [him] . . . people that made the operation run effectively."
Id. at 1089.

5.Fosco relented, remained in office, and
Coia assumed all of the responsibilities and duties of the General
Presidency as Fosco's health deteriorated. R. Ex. 387 at 1089.

6.In November of 1992, Fosco became gravely
ill and it became clear to Coia that a successor to Fosco would
soon be required. R. Ex. 387 at 1091. He began to actively seek
support from the GEB members to replace Fosco as LIUNA's General
President. R. Ex. 387 at 1090, 1101.

7.A GEB meeting was held in Florida in early
February of 1993 and, although Fosco was too ill to attend,
he flew to Florida in a private plane and stayed nearby in his
Florida residence. R. Ex. 387 at 1102-03. On the third or fourth
day of the meeting, the GEB members were informed that Fosco had
died. Id. at 1103.

8.Booker was with the Fosco family when Fosco
died and Coia instructed him to ask Fosco's wife whether
she would prefer that the election for the next General President
be held immediately or after the funeral. R. Ex.
387 at 1107. She told Booker that she wanted the election to be
held immediately, so there would not "be any distractions"
at Fosco's wake in Chicago. Id.

9.At an informal meeting of the GEB held
shortly after Fosco's death, Coia, pursuant to his authority under
Article VI, Section 5 of the International Constitution, announced
that the election would take place the following morning. International
Constitution, Article VI, Section 5; R. Ex. 387 at 1110-11.

10.Coia wanted the election for General President
to be held quickly for two reasons. He did not want an election
to be held in Chicago after Fosco's burial for fear of a repeat
of what he described as the "bad politicking" that took
place in 1975 during Fosco's election. R. Ex. 1106-07. Secondly,
he wanted to respect Mrs. Fosco's wish to have no campaigning
at her husband's wake and funeral. Id. at 1107. Coia also feared
that, if too much time passed, the influence of LIUNA's Chicago
faction would prevail. Id.

Serpico's Appointment as Chairman of
the Hearings Panel

1.Within hours of Fosco's death, Serpico
acknowledged that Coia had the votes necessary to be elected General
President and he asked Coia to endorse him for the post of General
Secretary-Treasurer. R. Ex. 387 at 1110-12. Coia declined this
request based on the mob-related "baggage" which Serpico
had acquired as a result of his inclusion in the President's Commission
on Organized Crime Report. Id. at 1112-13; Tr. 5333-34 In fact,
Coia told Serpico that he wanted him off the General Executive
Board entirely. Tr. 4983.

2.At Serpico's request, Coia met with him
again the morning after Fosco's death, and Serpico again asked
Coia for a job with the International Union. R. Ex. 387 at 1114-15.
He stated that he wanted to build up his pension since he would
be retiring in two years when he turned 65. Id. at 1114. Coia
told him that he would think about it. Id. at 1115.

3.Later that day, the GEB met and elected
Coia General President of LIUNA. Tr. 5320.

4.At Fosco's wake in Chicago several days
later, Coia told Serpico he would appoint him to the position
of Chairman of the Hearings Panel. R. Ex. 387 at 1116. At one
point during the wake, Coia informed Booker that he had "just
gotten rid of Serpico." Tr. 4989.

5.Coia testified that his sole motivation
in appointing Serpico to the position of Chairman of the Hearings
Panel was to ensure that Serpico would retire from the International
Union in two years. Tr. 4986. Coia intended to remove him from
that post if the two year period expired and Serpico was still
in office. Tr. 4989. At that time, Serpico was an elected International
Vice President, a member of the GEB, and could not be removed
by Coia by means of a mere personnel termination.

6.During Serpico's disciplinary hearing in
May of 1995, Coia testified that Serpico and John Matassa ("Matassa"),
a made member of the Chicago LCN and, at that time, a high ranking
LIUNA official in Chicago(18), approached him at his father's
funeral in March of 1993 in Rhode Island. Matassa told him that,
"he didn't like and the boys here [referring to "the
boys" in Chicago] did not like what [Coia] did by stealing
and taking the Presidency from Chicago." R. Ex. 387 at 1122.

7.Pursuant to Article VIII, Section 2(a-vii)
of the International Constitution, all recommendations of the
Hearings Panel must be submitted to the GEB for approval. Coia,
as General President, sits on the GEB.

8.Serpico almost always sat on a Hearings
Panel with another International Vice President and was always
accompanied by a member of the International Union's legal staff.
Tr. 3584. The legal staff member always wrote the recommendation
which was submitted to the GEB. Tr. 3585. The GEB had the final
authority to either approve or deny the Panel's recommendation.
Id. If the GEB did not accept the recommendation of the Hearings
Panel, it could reverse the Panel's recommendation or table the
recommendation for further deliberations and review of the record.
R. Ex 346 at 8.

9.Serpico was given an annual salary of $100,000
for the post of Chairman of the Hearings Panel. This was the same
salary as a LIUNA Regional Manager. Tr. 3664. Prior to this post,
Serpico was the Assistant to General President Fosco at an annual
salary of approximately $80,000.

10.The IHO finds that the salary of the Chairman
of the Hearings Panel was commensurate with the salary of a LIUNA
Regional Manager, a job of comparable International Union rank.

11.The IHO finds that Coia appointed Serpico
to the post, not to perpetuate Serpico's organized crime influence
on the Union, but as a method to facilitate his removal from the
Union.

12.The IHO finds that the move was not, in
this regard, a breach of Coia's duty authority. The IHO notes
that the GEB Attorney made a monetary settlement with Serpico
to cause Serpico to abandon his defense of the disciplinary charges
and to cause him to step down as an International Vice President.

LIUNA's Disciplinary Procedure Prior
to the Adoption of the EDP

1.As stated above, Coia had no authority
to remove Serpico from the GEB since Serpico was a duly elected
International Vice President. Tr. 4986-87.

2.Prior to the adoption of the EDP, disciplinary
actions against members were limited to the filing of Trial Board(19)
charges at the local level pursuant to Article XII, Sections 1-8
of the Uniform Local Union Constitution. Article XII permitted
a member of a local union to file charges against another member
of that same local. Those charges were then heard by the Executive
Board of the local or, in the event that the Executive Board was
disqualified, the charges were heard by the local's District Council.
See generally Uniform Local Union Constitution, Article XII, Sections
1-8.

3.No provision existed at the International
level to file disciplinary charges against an International officer.
In order to do so, Trial Board charges had to be filed in the
local union of which the officer was a member, by another member
of that local union. See Uniform Local Union Constitution, Article
XII, Sections 1-8.

4.Prior to the adoption of the EDP, disciplinary
charges were limited to violations of the Constitution.
See Uniform Local Union Constitution, Article XII, Sections 1-8.
Associating with organized crime figures had never been a subject
of disciplinary charges. The IHO's independent
research has found no charges brought in any union for associating
with unsavory or underworld figures prior to the Consent Decree
arising out of the litigation between the DOJ and the Teamsters.(20)
The Consent Decree instituted a very detailed procedure for investigating
and prosecuting disciplinary proceedings by an Investigations
Officer in hearings before an Independent Administrator whose
decisions were enforced by a federal judge. See United States
v. International Bhd. of Teamsters, Chauffeurs, Warehousemen and
Helpers of Am., 831 F. Supp. 278 (S.D.N.Y. 1993). The Consent
Decree which empowered an International Officer to bring charges
against local union officials was a departure from the protections
afforded local unions in the LMRDA and the case law at the time.
Judge Edelstein, in litigation arising from the decree, felt that
existing law was useful only by analogy. See United States
v. International Bhd. of Teamsters, Chauffeurs, Warehousemen and
Helpers of Am., 728 F. Supp. 1032, 1045 (S.D.N.Y. 1990).

5.The Teamsters' Investigations Officer was
empowered by the Consent Decree to bring charges against any
member for violating the union's constitution.

6.The Teamsters' constitution provides that
a member shall not bring disrepute on the International Union.
See Constitution of IBT, Article II, Section 2(a), Membership
Oath. The Independent Administrator has construed this provision
as encompassing a prohibition against associating with members
of organized crime. No equivalent provision existed in the LIUNA
Constitutions prior to the adoption of the EDP.

7.Coia approved the adoption of the EDP in
late January of 1995. The EDP instituted an investigation procedure
similar to that contained in the Teamster Consent Decree. The
EDP created the positions of GEB Attorney, the Inspector General,
the IHO and the Appellate Officer. It made associating with organized
crime a disciplinary offense. The members of the GEB, with the
exception of Serpico and Samuel Caivano, signed the EDP on February
13, 1995. See EDP, Agreement, Laborers' International Union of
North America -- United States, pp. 55-57. On the same day the
EDP was adopted, Coia suspended Serpico and Caivano pursuant to
the new emergency powers granted him by the EDP. The GEB Attorney,
a position created with the adoption of the EDP, filed disciplinary
charges shortly thereafter and charged Serpico with being an associate
of organized crime. Coia testified at Serpico's disciplinary hearing
as the GEB Attorney's key witness in May of 1995. See generally
R. Ex. 387.

8.Michael Bearse ("Bearse"), now
LIUNA General Counsel, testified that, during the time Coia was
General Secretary-Treasurer, there were no effective disciplinary
procedures at the International level of the Union to remove a
member or officer for wrongdoing. Tr. 4570-71. He contrasted this
situation with the present day, post-reform procedures:

Prior to reform, the actual practical ability
and power and authority of the international union to intercede
into the affairs of the local union was . . . extremely restricted
and limited. We did have authority under the constitution and
under Title 3 of the LMRDA to try and assert a supervision or
trusteeship, assuming we had evidence to establish the legal grounds
for such, but otherwise both the constitution and . . . applicable
labor law in the normative models within the labor relations community were to recognize that local unions are separate, distinct, and independent entities.

Tr. 4567.

* * *.

[P]rior to the enactment of the LIUNA reforms,
the code of ethics and all that's come with it, there was no ability
effectively to investigate an associational [with the LCN] issue
even if there had been . . . a basis to do that -- but . . . there
would have been no basis to look into association as some kind
of prohibited misconduct. Certainly if there were a discrete act
of wrongdoing, if there had been improper selling of jobs or extortion
or something of that kind, some discrete act, a local union could
have looked into that and if appropriate remedied it, or perhaps
the international might have come in with a supervision or trusteeship.

* * *

[O]ne of the major purposes in LIUNA in enacting
the code [of ethics] and the reforms that have come with it and
the particular provisions in terms of barred conduct was to enable
LIUNA to address just that kind of issue, and it seems to me that
necessarily that means that, before we had the tools that came
with the code, before we had the code of ethics, before we had
the policies, before we had a whole army, virtually, of ex-FBI
agents, before we had a GEB Attorney with the ability to take
depositions, before we had a provision that essentially waived
the Fifth Amendment, we had no effective either method or basis
to address or remedy that kind of discrete associational issue.

Tr. 4578-80.

1.After several hearing days in the Serpico
Disciplinary Matter, the GEB Attorney and Serpico reached a settlement.
Serpico left his post as International Vice President, but remained
a member of Local 8 in Chicago. Although the agreement is confidential
correspondence, the IHO takes notice that the GEB was constrained
to pay a sum of money to effectuate Serpico's final removal.

IHO makes note of this merely to emphasize
that even, with the EDP, removing Serpico was not an easy task.

Discussion

The GEB Attorney argues that Coia's appointment
of Serpico as the Chairman of the Hearings Panel meets the criteria
for permitting an organized crime influence to continue in LIUNA,
yet he fails to indicate how Coia was empowered to do more to
remove Serpico under the LIUNA procedures in force at the time.

To view this and the other charges relating
to knowing association with any objectivity, one must examine
the disciplinary machinery available to Coia at the relevant time.

In 1993, there was no EDP or EPC, no IG,
and no GEB Attorney. The only provision in the Constitutions which
permitted any disciplinary action against a union member was Article
XII, Sections 1 through 8 of the Uniform Local Union Constitution,
which permitted a member of the local in which the putative defendant
belonged to file "Trial Board" charges against the defendant.
Thus, Coia would have had to convince a member of Local 8 in Chicago,
where Serpico was a member, to file Trial Board charges against
him. This would have been virtually impossible as a union political
matter. The Trial Board would have been made up of the remaining
Local 8 Executive Board members or, if they disqualified themselves,
the members of the Chicago District Council.(21) There would have
been no likelihood of success in this venture and, in fact, the
member who brought the charges would have then been at the mercy
of the Local Executive Board for jobs and other benefits.

Until the adoption of the EDP in 1995, the
charge of association with a member of organized crime was not
grounds for dismissal from LIUNA.

It must be kept in mind that Serpico was
unlike other LCN associates. He did not assert the Fifth Amendment
before the President's Commission on Organized Crime and he had
his own LIUNA power base. He was a powerful political figure in
Chicago and had been appointed and re-appointed Chairman of the
Chicago Port Authority by three Illinois governors. At his disciplinary hearing, he
was defended by a nationally well respected law firm. For Coia
to attempt to take on Serpico without recourse to disciplinary
procedures such as those now provided for in the EDP would have
resulted in certain failure.

It should be further noted that, following
the passage of the EDP, Coia immediately suspended Serpico for
his association with organized crime. Tr. 5371-72. Part of the
basis for the suspension, and a great part of the GEB Attorney's
case, was the Chicago airport incident among Coia, Serpico and
Solano, as related by Coia during Serpico's Disciplinary Hearing
in May of 1995. -- the chief witness of the GEB Attorney.

Moreover, after several hearing days, Serpico
and the GEB Attorney settled the matter. As part of the settlement,
there was a monetary payment to Serpico, indicating that removal
of Serpico was a difficult matter, despite the provisions of the
newly adopted EDP.

Conclusions

1.Coia's appointment of Serpico to the post
of Chairman of the Hearings Panel was not intended to permit
organized crime influence over LIUNA, and Serpico's appointment
did not result in organized crime influence over LIUNA but was
intended to facilitate Serpico's removal from LIUNA.

1.Coia did not violate Title 29 USC 501(a)
by appointing Serpico to the post of Chairman of the Hearings Panel. The salary
was commensurate with the salary of a Regional Manager a comparable
LIUNA post.

1.Coia's dealings with Serpico during 1992
through 1995 were necessitated by Serpico's position in LIUNA
and not by Coia promoting Serpico's influence in LIUNA. Their
dealings were adversarial and, in addition, were permitted by
the Carpenters' Exception to barred conduct.

2.The IHO finds that the GEBAttorney has
not proved Charges X through XIII by a preponderance of the evidence.

The three Charges relating to Coia's dealings
with Viking Oldsmobile-Cadillac-GMC, Inc. ("Viking")
and its President and CEO Carmine Carcieri ("Carcieri")
must be considered as one subject. The IHO views Charges XIV,
XV, and XVI as one transaction. The IHO will apply the labor arbitrators'
technique of examining the evidence as a whole and will focus
his inquiry on what the IHO believes to be the key issue presented
by these three charges. See Edna Elkouri & Frank Elkouri,
How Arbitration Works, 322-23 (Marlin M. Volz & Edward P.
Goggin eds., 5th Ed. 1997).

Barred Conduct -- Obstruction of the GEB
Attorney and Inspector General:
On or about November 29, 1995, August 2, 1996 and January 29,
1997, ARTHUR A. COIA obstructed and/or interfered with the GEB
Attorney and Inspector General, to wit: Coia provided inaccurate,
misleading, and false deposition testimony to the GEB Attorney
when he denied any knowledge of a 1993 bid by PH&H Fleet America
to lease automobiles to LIUNA and its affiliates, despite fully
knowing that he had been briefed on the competing PH&H Fleet
America and Viking bids, and that he had an obligation to answer
all questions fully and truthfully, in violation of the LIUNA
barred conduct sections of the Ethics and Disciplinary Procedures
and the LIUNA Ethical Practices Code.

Chronology

The following chronology is relevant to understanding
the context of the above alleged charge:(23)

Thomas Needham ("Needham") became
LIUNA's Comptroller in 1968 and remained in this position until
he retired in 1995.

In 1989, Coia replaced his father as LIUNA's
General Secretary-Treasurer.

In 1989, Coia introduced Carmine Carcieri
("Carcieri"), the President and CEO of Viking, to then-General
President Angelo Fosco.

In 1990, LIUNA awarded its fleet leasing
contract to Viking.

In February of 1993, Coia replaced the late
Angelo Fosco as LIUNA's General President and Norwood became LIUNA's
General Secretary-Treasurer. Carcieri met with Needham and Norwood
at LIUNA's headquarters in Washington, D.C. in May of 1993 and,
subsequent to this meeting, Carcieri sent Needham Viking's proposal
for the 1994 fleet leasing contract.

In late May or early June of 1993, Needham
received a competing bid from PHH Fleet America ("PHH")
for the 1994 fleet leasing contract.

After receiving the bids from PHH and Viking,
Needham prepared a cost comparison spread sheet and met with Coia
to discuss the price differential.

In June of 1993, Needham received an unsolicited
new bid from Viking, which had lowered its prices to match PHH's
prices.

Viking retained LIUNA's fleet leasing contract
for 1994.

In 1995, Viking began to be phased out as
LIUNA's fleet leasing vendor.

Introduction

In his opening statement to Charge XV, the
GEB Attorney made lengthy comments concerning the history of LIUNA's
fleet leasing vendors and the 1993 bidding competition between
two of those vendors, Viking and PHH, for the International Union's
1994 fleet leasing contract. He stated that Charge XV "is
a charge of obstruction, and that is a charge that Mr. Coia gave
false and misleading testimony in his depositions by flatly denying
his knowledge of the PHH bid when, in fact . . . he not only knew about the bid,
but obviously furnished it to Viking so that they could preserve
their contract in 1994." Tr. 64-65.

The GEB Attorney infers that Coia, or someone
at the behest of Coia, improperly furnished the incumbent fleet
leasing vendor with a competitor's prices in order to give the
incumbent vendor an advantaged opportunity.

Findings of Fact

LIUNA's Relationship with Viking and
PHH

Needham, who is no longer a LIUNA employee
and not subject to the IHO's subpoena power, was LIUNA's Comptroller
for 27 years, from 1968 until his retirement in 1995. Tr. 2494,
4370. Needham did not testify herein but acceded to interviews
with associate GEB Attorney Michael A. Hammer ("Hammer")
and attorney Gilbert O. Greenman ("Greenman") of the
law firm representing Coia. These attorneys then testified concerning
their interviews with Needham. The IHO will note where the testimony
of these two attorneys differs.

During Needham's career as LIUNA's Comptroller,
virtually all executive financial decisions were made by the International
General President. Tr. 2494.

In the late 1960s, the International Union
did not have an automobile leasing or "fleet leasing"
program. Tr. 2499. Needham instituted the fleet leasing program
in order to control the International Union's automobile travel
expenses. Tr. 2499-500.

Needham handled all correspondence between
the International Union and the fleet leasing vendors. He disclosed
the rates of all bidders and dictated the rate that needed to
be offered by the incumbent vendor to retain the contract. See
R. Ex. 228A, 231.

The International Union has never had a practice
or policy of "blind bidding" for its automobile leasing
contracts. Disclosing competitive prices to the incumbent vendor
was the International Union's general practice. Tr. 4375. Booker
testified that there was no prohibition on seeking lower bids
by negotiating with an incumbent vendor. Tr. 3613. In fact, this
"was encouraged to get the best price for the best deal."
Id.

In 1990, when Coia was General Secretary-Treasurer,
he introduced Carcieri, the President and CEO of Viking, to Angelo
Fosco. Viking then became LIUNA's automobile fleet lessor.(25)
Tr. 2505. In February of 1993, Coia became General President and
Norwood succeeded him as General Secretary-Treasurer.

In May of 1993, Needham and Norwood met with
Carcieri and Joe Picozzi ("Picozzi"), the sales operations
contact at Viking.(26) Picozzi represented that Viking's 1994
rates would remain the same or be lower than its 1993 rates. Tr.
2511-12. This statement proved inaccurate. R. Ex. 252.

Upon receiving Viking's 1994 proposal, Needham
sent a memo to Norwood and, referring to the proposal, stated,
"I want you to know that this is an insult to our intelligence.
. . . This turns out to be a real 'con job'. . . [W]e have to
do some real negotiating on this proposal if we are to stay with
Viking. If we can't get them to come off this overloaded proposal,
we should start taking bids from other companies." R. Ex.
252.

According to Hammer, a bid was secured from
PHH but Norwood told Needham that General President Coia would
want to stay with Viking. Tr. 2520; R. Ex. 253, 256. It was the
general practice of the International Union to remain with the
incumbent vendor.

According to Hammer, Needham analyzed PHH's
bid and determined that it was approximately $85,000 per year
lower than Viking's proposal and approximately $169,000 lower
over the course of the two year contract. Tr. 2522; GEB Ex. 196.

Coia told Needham to calculate how much higher
Viking's 1994 contract bid was than the one it had submitted
for the previous year's contract. Tr. 5048.

Needham presented documents to Coia who,
upon seeing them, became angry. Tr. 2527-28. (according to Hammer).
See also Tr. 4383-84. (according to Greenman).

According to Hammer, Coia asked Needham to
leave the information with him. Tr. 2529.

Needham told Hammer that he took both a summary
cost-out sheet and the bids of Viking and PHH to Coia's office;
but he told Greenman that he only took the proposals to Coia.
Tr. 2527-28 (showing bid and cost out sheet to Hammer); 4383 (showing
proposal to Greenman). The IHO has no reason to doubt that both
attorneys correctly related what Needham told them.

According to Needham (as related by Greenman),
after the initial conversation with Coia, he never had any other
conversation with Coia about the 1993 leasing decision. Tr. 4384-85.
Needham thereafter received his instructions from Norwood. See id.

In time, Needham received a new, unsolicited
bid from Viking which he stated matched the PHH bid "dollar
for dollar" but, in fact, the new Viking bid did not match
the PHH bid for the 1994 contract "dollar for dollar"
on any car. Tr. 2529-30. Viking's prices were either slightly
higher or lower than PHH's prices on the various automobiles although,
overall, Viking's bottom line price met that of PHH. R. Ex. 255.

Viking retained LIUNA's fleet leasing contract
for 1994. Tr.

2530.

When R. P. "Bud" Vinall ("Vinall")
succeeded Norwood as General Secretary-Treasurer of LIUNA, the
practice of revealing price differentials and rates of competitors
to the incumbent vendor continued. See e.g. R. Ex. 261. Norwood
died sometime in 1994.

Viking lost the International Union's fleet
leasing contract in 1995 when it was unable to secure the kind
of financing which would allow it to remain competitive in the
fleet leasing business. Tr. 4411-12.

Coia's Deposition Testimony in Question

The GEB Attorney originally argued that Coia
obstructed the GEB Attorney's investigation of him by falsely
stating in his depositions of November 29, 1995, August 2, 1996
and January 29, 1997 that he had no knowledge of the bid which
PHH submitted to LIUNA for the 1994 fleet leasing contract.

The record contains the following deposition
testimony by Coia on November 29, 1995 . Although the GEB Attorney
cited the November 29, 1995 deposition in Charge XV and submitted
it into evidence, he did not offered any argument in his post-hearing
briefs regarding the probative value of this deposition. The IHO
finds certain portions of the November 29, 1995 deposition to
be particularly enlightening on this Charge:

[BY THE GEB ATTORNEY:]

Q: Now,
in 1993, you described a minute ago what you perceived to be problems
[with the cost of the fleet leasing]. What steps did you take
to change the manner in which the union leased vehicles, the International
Union?

[BY COIA:]

A: I got
together with Jim Norwood. And then I assigned him to get more
involved into developing some bid specifications so that we could
lower the cost either by . . . providing certain maintenance on
the cars . . . [or] raising the residual. Whatever methods there
were.

He was really in charge -- I put him in charge
of that aspect of it.

* * *

A: Jim
Norwood was quite good with that.

Q: And
did Mr. Norwood then prepare a revised bid package, if I could
call it that?

A: Yes.

* * *

A: It
changed.

Q: And
when was that?

A: That
had to be in -- that had to be in the mid-to later part of '93,
again as part of my restructuring of the organization.

Q: And
was that changed bid package put out for bid in 1993?

A: I'm
not sure if it was or not. I can't say that for certain. I
would have to get that record back.

* * *

Q: And
were -- have those new set of options been, since 1993, put out
for competitive bid from among different vendors of vehicles --
suppliers of leased vehicles....

A: Since
that time we have noticed other inequities in the bid process,
because the more you do this, the better you get. And we have
recently drafted a new specification to be put out for bid.

Q: I'm
now asking about the specifications that were developed by Mr.
Norwood in '93.

A: No.

Q: Were
they ever put out for competitive bid so that different suppliers
of leased vehicles could provide bids on supplying those vehicles
to the International Union?

A: I don't
think so. No. I don't think so.

* * *

A: You
got to understand one thing. When it went into effect, lets say
the end of '93, one year goes by. We're into the process of it.
We're developing new ideas. So it's more appropriate now to do
that for the first of -- January of 1996.

There are only so many times you keep putting
these cars out to bid because -- or anything else for that matter.
You get into a way that you're comfortable with a firm, the way
they do business, and all of a sudden, you got maybe 20 cars out
with one firm and then possible ten out with another one and --
ties and maintenance and insurance and everything else becomes
a problem.

Q: To
your knowledge, after this -- my understanding is, and you can
stop me if I'm wrong here, sometime after Mr. Carcieri had a meeting
with Mr. Fosco, there was a bid process and Viking was the successful
bidder. Is that correct?

A: Yes.

Q: And
when was that, to your knowledge?

A: It
may have been the first -- let's say January 1st of 1990.

* * *

Q: Okay.
And since that time, have competitive bids ever been sought again
from among different bidders?

A: I think
one other time.

Q: Do
you recall when that was?

A: I would
have to say -- you know, I hate to make a statement -- I'm uncertain
to it, but it may have been in '92.

Q: All
right.

A:The
best way of handling it is to just check with Tom Needham

* * *

Q: All
right. And since you became the General President in February
of '93, have the leased vehicle specifications, whatever they
are, been put out to bid?

A: No.
They will be put out to bid.

Q: And
when the specifications were put -- well, since you don't know
whether they were or not, to your knowledge, has Viking continued
to supply the leased vehicles to the International since sometime
around 1990?

A: Yes.

Q: Whether
or not they were successful or not successful, in a second bid, you don't know whether that actually
happened?

[BY MR. GUTMAN- DEFENSE COUNSEL:]

If they had not been successful in the second
bid, would they have --

[BY MR. COIA:]

A. They
wouldn't have kept it, no.

[BY MR. GUTMAN:]

So if there was a second bid they --

[BY THE GEB ATTORNEY:]

Q. Right.
If there was a second bid, they were successful?

[BY MR. COIA:]

You see --

[BY MR. GUTMAN:]

And if there wasn't, they won the last one?

[BY MR. COIA:]

A: In my restructuring, Bob, I put different
people in charge of different operations. It was different before
that and before 1993.

The General President had all the decision-making
process, or the handling of these things. So when you talk about
bids and nonbids since 1993 and specifications, the Secretary
Treasurer was in charge of that. . . .

So I may seem uncertain as to certain
things. I'd have to get my staff in here and let them answer the
question, and then I could give you a better answer.

GEB Ex. 200, Tab C at 209-216 (emphasis added).
Coia's testimony at the November 29, 1995 deposition demonstrates
that, upon becoming General President, he restructured the operation
of that position and delegated responsibility in many areas to
other persons. Norwood and Needham were given authority over LIUNA's
fleet-leasing operation and specific questions concerning that
operation had to be directed to them.

Coia testified about the delegation of authority
over LIUNA's fleet leasing program in his deposition of
August 2, 1996 as well.

The record contains the following deposition
testimony by Coia on August 2, 1996. The GEB Attorney bases his
charge on the highlighted sections of this testimony:

A: I'm
not sure if there was one in '93. When I was -- the first bid
process of which Viking was involved I think was in 1990 when
they were the low bidder and got the lease arrangement with LIUNA,
and then there were two subsequent ones after that, whether the
were in '91, '92 or '93, I'm not sure.

Q: Let
me see if I can place you in time here a little bit. . . I'm handing
you an exhibit. It's marked Exhibit 2, and why don't you just
take a look at that.

A: Right,
I'm familiar with this, yes.

* * *

Q: To
clarify, this Exhibit 2 purports to be a May 19, 1993 memorandum
to James Norwood from Thomas Needham regarding Viking proposal
for new fleet lease program and 1994 cars, and I take it from
your statement that you're familiar with this memorandum?

A: Yes.

Q: Did
this memorandum come to you for viewing at a certain point in time in or around May of 1993?

A: It
had to be around there because I was aware of it.

* * *

Q: And
as you've already testified, in May of 1993 your position was
the general president of LIUNA?

A: Yes.
See, normally this type of proposal or review would be done --
when I say 'normally' by my predecessor, which would have been
the general president. [Fosco]. I divided and tried to delegate
work and authority to others within the building. . . . Cars was
Norwood . . . I tried to, again, put more responsibility in delegation
of authority to others within the operation so it could be more
[efficiently] run. That's how Norwood was involved with the leasing,
to review it and to make it better.

* * *

Q: I am
going to show you a one-page document, which has been marked as
Exhibit 3. . . .I would ask you to [take] a look at that and tell
me when you're done.

* * *

Q: This
is a document that is marked May 21, 1993, a memorandum to James
Norwood from Thomas Needham.

A: Yes.

Q: Do
you recognize that document?

A: Yes.
I recall this -- when I discussed this with Norwood to have him
get back to Needham to find out what those cost factors really
would be, and I believe that's how this memorandum came about.

Q: So
this . . . is a document that was generated at your request to
further clarify the information?

A: Yes. The first memorandum when this came
back to me showed that this was going to be significant cost increase
from the last proposal that we had, and I wanted to get back exactly
what the cost was going to be, and that is how this one came about.

* * *

A: This
is a new proposal submitted to us by Viking. This was their proposal
to us for the upcoming year. We reviewed it, Norwood, Needham,
and myself. I'm not sure exactly, but I reviewed it, got back
to Needham with respect to coming up exactly what these figures
would be in real dollars, and the second memorandum... reflected
what those additional costs would be if we . . . accepted the
Viking proposal, which we did not.

* * *

[BY THE GEB ATTORNEY:]

Q: Are you familiar with that document
[the PHH bid]?

[BY COIA:]

A: I don't recall ever seeing this document.

Q: Do you recall a competing leasing proposal
being made around the June 1993 period which offered a different
bid than the offer provided by Viking?

A: No. This is the first time - this is
the first time I've seen this document.

Q: This document being Exhibit 4?

A: Being June 11, 1993, yeah. I might
add to the best of my recollection.

* * *

Q: Were you aware back in June of 1993
that a competing bid was made to the Viking proposal for leasing?

A: No.

* * *

A: Let me add -- I want to just add something.
If I was aware of this . . . I would have interviewed these people
[at PHH] and found out why and how this was developed with bid
specs and so forth because as you go from this May 21 memorandum
with Viking, we then sat down to come up with better figures with
Viking as to residuals and buyouts and certain type cars. We changed
our process to lower our cost, and they never were interviewed,
PHH. Based on this they should have been.

* * *

Q: Tell
me what you recall about discussing Viking's bid proposal in May
of 1993 with Tom Needham? Do you recall having a meeting --

A: I'm
not sure exactly with Tom Needham alone, or with Jim Norwood and
Tom Needham, but I can tell you my recollection of the Viking
new bid -- we will call it -- which is the May 19 proposal. No
bid, proposal, which was significantly high. Then we got the actual
dollar factor as to what that would be.

Then Norwood and myself sat down to review
the entire leasing program. . . .

GEB Ex. 200, Tab D at 67-76 (emphasis
added).

The GEB Attorney also cites to Coia's January
29, 1997 deposition where the following exchange occurred
between him and the GEB Attorney. The GEB Attorney bases his Charge
on the highlighted testimony.

[BY THE GEB ATTORNEY:]

Q: . .
. . Let me ask you a few questions about the Viking Leasing contract,
just to clear up a couple of points . . .

Viking first started to lease cars to the
International in approximately 1989 or 1990? I am referencing
some of your prior testimony. I am just trying to create a context
here.

[BY MR. COIA:]

A: Yes.

* * *

Q: And
Viking ultimately submitted a bid, and arranged for the contract.

Prior to Viking submitting their proposal,
did you provide Mr. Carcieri or anyone else at Viking with the
rates that were being charged to . . . [PHH], . . . another entity
in the bidding process?

A: No.

Q: Okay.
Let me show you . . . Exhibit No. 4 from [the August 2, 1996 deposition].
And I just want to refer to you the second page, which is a breakdown
of a cost comparison of the bid proposals of Viking and this [PHH],
and I will ask --

A: Was
this a bid?

* * *

A: I thought we went over this before. I
never knew that this PHH submitted any proposal to the Laborers.

Q: Okay.
I understand that. I am not asking you that question over again.
What I am asking you is on the second page, if you know whose
handwriting that is; I don't think I asked you that before. In
other words, that is not your handwriting?

A: No.

Q: Do
you know whose handwriting it is?

A: I think
it is Tom Needham's.

Q: Okay.
And it is your testimony that you don't recall PHH providing a
proposal at all; is that what you just . . .

* * *

A: I don't
know. I think in my testimony, I think, I don't know if Tom Needham
solicited this on his own or whether it was part of a bid process.
I was not aware of it.

GEB Ex. 200, Tab H at 208-211 (emphasis
added).

Discussion

The GEB Attorney argues in his post-hearing
brief that Coia cast aside his affirmative duty to cooperate fully
with the GEB Attorney and IG's investigation of his conduct, and
callously disregarded all LIUNA members' duty to provide the full
and complete truth to the GEB Attorney and IG by falsely stating
that he had never seen or could not recall seeing the bid from
PHH. GEB Br. at 161-62.

In his responsive brief, the GEB Attorney
states that the "core issue" of Charge XV is: "Did
Coia tell the truth during his deposition testimony when he testified
that he had never seen the bid PHH submitted for the 1994 fleet
leasing contract with LIUNA?" GEB Resp. Br. at 62. He characterizes
Coia's testimony as "unadorned obstruction" and states
that "[t]he answer [to charge XV] is as clear as the matter
is simple: Coia lied under oath." Id.; GEB Br. at 162 (characterizing
testimony as unadorned obstruction).

In order to show that Coia's deposition testimony
in question was obstructive, the GEB Attorney must show the testimony
was material, misleading, and intentionally deceptive. See In
re Martire 1997 A.O. 81 (97-008D).

When viewed in the context of the entire
depositions and the rather disjointed question and answer procedure
utilized by the GEB Attorney, however, it is clear that the GEB
Attorney has not established that Coia attempted to mislead. Coia
testified that he had delegated responsibility for LIUNA's fleet
leasing to Norwood and Needham and the record reflects that he
did not involve himself in the day-to-day operations of the International
Union's vehicle leasing program. Indeed, at one point during his
November 29, 1995 deposition, he recommended that the GEB Attorney
refer a certain question to Needham. GEB Ex. 200, Tab C at 214.

Moreover, the GEB Attorney has not demonstrated
how these alleged misstatements were material to an investigation
being conducted by the GEB Attorney. Although the object of the
investigation was not clear from any evidence in the record, the
Attorney's post-hearing brief suggests that Coia was attempting
to avoid testifying that persons at Viking were shown the PHH
bid. The GEB Attorney further argues that Coia acted improperly
by revealing PHH's bid to Viking, thus giving Viking the opportunity
to submit a more favorable proposal. This flies in the face of
substantial evidence in the record.

The record reflects that the International
Union does not currently have and has never had a practice or
policy of blind bidding. It negotiates with incumbent vendors
to obtain the lowest rates on services provided to the Union by
soliciting competitive bids and continually sharing the price
differentials to the incumbent.

As a final note, the IHO would point out
that the key evidence on this charge consists of Needham's recollections
regarding the bidding on the 1994 leasing contract. These recollections
were received by way of the hearsay testimony of attorneys Hammer
and Greenman. While there is no doubt that these gentleman faithfully
related what Needham told them, Needham himself was not subjected
to cross-examination. Under these circumstances,
cross examination of Needham in the presence of the IHO would
have been very helpful.

Conclusion

1.The GEB Attorney has not proved by a preponderance
of the evidence that Coia intended to mislead the GEB Attorney.

2.The GEB Attorney has not shown that Coia's
alleged statements are material to an investigation by the GEB
Attorney.

3.The IHO finds that Charge XV is not proven
by a preponderance of the evidence.

4.The overall importance of Charge XV is
that it is really a stepping stone to Charge XIV which, as will
be seen, is far more substantial. The IHO will utilize the recognized
technique of labor arbitrators and will refocus the evidence and
the issue. See Edna Elkouri & Frank Elkouri, How Arbitration
Works, 322-23 (Marlin M. Volz & Edward P. Noggin eds., 5th
Ed. 1997). The IHO will utilize the information relating to Viking's
favored incumbent status provided in support of Charge XV in assessing
Coia's and Carcieri's actions in Charge XIV.

Coia's Business Relationship with Viking

Charge XIV alleges:

Ethical Practices Code -- Business and
Financial Activities of Union Officers:
From on or about July 12, 1991, to in or about February 1994,
ARTHUR A. COIA, while a member and officer of LIUNA, that is,
General Secretary-Treasurer or General President, received and
accepted something of value from a professional enterprise with
which the Union conducted business, to wit: Coia caused or allowed
Viking to structure the transfer to him of a 1991 Ferrari F40
automobile, Vehicle Identification Number ZFFMN34A6M0089653, in
such a manner as to foster the misleading appearance that Viking
maintained ownership of the automobile and to avoid transferring
the Manufacturer's Certificate of Origin ("MCO"), thereby
allowing Coia to maximize the value of the automobile on resale, and to
avoid the payment of at least $77,750 in taxes, in violation of
the LIUNA Ethical Practices Code, "Business and Financial
Activities of Union Officials," Section 4.

Introduction

The GEB Attorney has charged Coia with violating
the EPC, Business and Financial Activities of Union Officials,
Section 4 by receiving something of value from a union vendor.
Specifically, it is alleged that Coia was given an opportunity
to purchase a Ferrari F40 automobile ("Ferrari" or "F40")
in a joint venture with Viking, the International Union's fleet
leasing vendor, and profit from its sale.

The EPC, Business and Financial Practices,
Section 4 states in pertinent part:

every officer and representative must avoid
any outside transaction which creates an actual or potential conflict
of interest. . . .

(4) No officer or representative shall accept
"kickbacks," under-the-table payments, valuable gifts,
lavish entertainment or any personal payment of any kind . . .
from a business or professional enterprise with which the Union
does business.

Id.

Findings of Fact

1.As discussed supra in the Findings of Fact
and Conclusions relating to Charge XV, from 1990 to 1995, Viking
was the automobile fleet lessor for LIUNA. Coia and Carcieri,
the President and CEO of Viking, were long time friends. Tr. 4412-13.

2.In December of 1987, Carcieri traveled
to Ferrari headquarters in Italy to meet with Giovanni Battista
Razzelli ("Razzelli"), the Directore Generale of the
company, to attempt to become a franchised Ferrari dealer. Tr.
4416-18. Razzelli did not grant Carcieri a franchise, but agreed
to sell him a Ferrari F40. Id. at 4416. See R. Ex. 296, 297.

3.A Ferrari F40 is a limited edition exotic
car which Ferrari began developing in 1987 or 1988 as an anniversary
car, commemorating 40 years of being in business. Tr. 5135-36.
Only three to four hundred F40s were originally scheduled for
production. Id.

4.Carcieri and Ferrari of Italy corresponded
over the next few years about his acquisition of an F40 but, ultimately,
Carcieri never received an F40 directly from Italy. See R. Ex.
298-313.

5.Coia testified that he was aware that Carcieri
had spent a great deal of time attempting to acquire
the F40 from Italy but, in April or May of 1991, Carcieri told
him that he was considering canceling the deal. Tr. 5105. Carcieri
offered Coia the opportunity to join him in obtaining an F-40
and requested that Coia take the financial risk on the car, in
exchange for an opportunity to profit on it. Coia agreed to this
arrangement. Id.; Tr. 5109-10.

6.In July of 1991, Coia and Viking purchased
a Ferrari F40 for $450,000 from Autohaus, a Ferrari dealership
located in Cohasset, Massachusetts. Tr. 3095 (cost of
F40), Tr. 4426-27, 5111-12; GEB Ex. 135 (stating price paid for
F40) and 200, Tab D at 84-85. Carcieri canceled his order on the
F40 he was expecting from Italy.

7.The entire down payment on the F40 was
comprised of a cash payment by Coia and the trade-in of two vehicles
supplied by Coia. GEB Ex. 135, 138. Carcieri secured a $300,000
loan from GMAC on the Viking floor plan for the balance
of the F40 cost. GEB Ex. 136, 137. The F40 was purchased in Viking's
name.

8.For the entire time the car was carried
in Viking's name, Coia paid all of the carrying costs on the vehicle
including the monthly finance charges, maintenance fees and insurance.
Tr. 5096-96, 5403. See also GEB Ex. 141, 143, 145, 154-61, 163-88.

9.At the time of the F40 transaction, Coia
was LIUNA's General Secretary-Treasurer.

Preservation of the Manufacturer's
Certificate of Origin ("MCO")

1.The terms MSO and MCO are interchangeable
and refer to a "statement from the manufacturer that
a vehicle has never been titled in any state and that the person
who is receiving the vehicle or titling the vehicle would be the
initial title owner." Tr. 2837, 2832 (discussing interchangeable
nature of terms).

2.Coia testified in his depositions on November
29, 1995 and August 2, 1996 that the Ferrari F40 was titled
in Viking's name in order to preserve the MCO and thereby maintain
the value of the car. GEB Ex. 200, Tab C at 221; Tab D at 88-91.

3.Ordinarily, once an automobile has been
sold, the dealer signs the MCO to the customer and then presents
it to the state transportation authorities to receive a title
to the vehicle. Tr. 2838.

4.A titled or pre-owned automobile would
have a lower resale value than an automobile that retained its
MCO and had never been titled. Tr. 2838. In the exotic car
market, there is a certain "cachet" to being the first
owner. Tr. 2839.

5.Coia testified that the effect of his transaction
with Viking was that the dealership retained nominal ownership
of the F40 so that, when it was resold, it would appear as though
the vehicle was an untitled new car. GEB Ex. 200, Tab C at 223-24.
Viking's name appeared on the F40's MCO. R. Ex. 318.

6.Viking designated the Ferrari F40 as a
demonstration vehicle so that Coia could use it pursuant to a
temporary loan agreement that Coia and Viking had entered into.
GEB Ex. 139, 147. Coia's use of the car was nominal. Among exotic
car enthusiasts, cars such as the F40 are not driven for pleasure.
They are only used for purposes of demonstration and to keep the
engine in lubricated condition. When the car was sold it had 1,500
miles on it.

7.The Ferrari F40 was kept on Viking's premises,
as well as in Coia's personal garage, and was shown at car exhibitions
in Florida. Tr.4518-19; 5112-14.

8.The F40 was ultimately sold through a broker
in New York in 1994. Tr. 4520. By that time, the demand for the
F40 had dropped substantially.

9.Coia received a total of $380,000 on the
sale of the F40, which resulted in a loss to him of $70,000. Tr.
5097 (testifying loss of $70,000); GEB Ex. 153 (receipt of $380,000);
GEB Ex. 192. Coia also paid a total of $35,000 in interest and
carrying costs on the F40. Tr. 5096-98; GEB Ex. 154-161.

10.Carcieri earned a $15,000 commission on
the sale of the F40. Tr. 4519-21.

11.At the time of the sale of the F40 in
1994, the Federal luxury tax was paid to the IRS by Viking, the
seller of the automobile, after collecting it from the buyer.
Tr. 2777.

12.Coia, on his own, could have purchased
the car on the open market from Autohaus but the joint venture
with Carcieri offered him the opportunity to buy it with the added
financial resources supplied by Carcieri's relationship with GMAC.

13.The joint venture with Carcieri also offered
Coia the opportunity to sell the car with the enhanced value of
a new vehicle which still had its MCO.

14.The way in which the F40 transaction was
structured between Coia and Viking permitted Coia, as a partner
of Viking, to, in essence, act as the wholesale dealer of the
vehicle and avoid the payment of the luxury tax(27) on the car.
This tax was ultimately borne by the person to whom the F40 was
transferred after Coia and Viking. This is a one time tax. This
is another benefit presented to Coia by Viking which would not
have been available to him with any other dealership.

15.Coia was given this unique opportunity
by virtue of Carcieri. Although Carcieri was an old friend, he
was also a major vendor of the Union.

16.Coia would not have been afforded this
same opportunity on the open market.

17.Although no union funds were involved,
there were no kickbacks or payments, nor any direct effect on
the union, there was a definite conflict of interest and an appearance
of impropriety.

18.The EPC strictly prohibits any outside
transactions which create a potential conflict of interest. EPC,
Business and Financial Practices, Section 4. It also prohibits
officers from receiving personal benefits of any kind from a business
enterprise with which the union does business. Id.

19.The spirit of the EPC and basic fiduciary
law prohibit such transactions.

20.The IHO finds it was a conflict of interest
for Coia to receive the favorable opportunity to participate in
the venture.

21.It is irrelevant that Coia lost money
on the deal; in point of fact, he was provided favorable terms
and had the opportunity to make a large profit from the F40. It
is this opportunity, which was enhanced by Carcieri's financing
arrangement with GMAC, the avoidance of the luxury tax and Carcieri's
retention of the MCO, that reflected a personal benefit prohibited
by the EPC. The ethical propriety of the venture cannot be based
upon whether the participant makes a profit.

Conclusions

1.Coia's joint venture with Carcieri to purchase
the F40 was a direct conflict of interest to his position as General
Secretary Treasurer and Carcieri's position as a major LIUNA vendor.

2.Although there were no union funds involved
and there was no direct effect on the union as a result of this
joint venture, Coia was offered an opportunity to make a substantial
profit from the sale of the F40. This venture was in violation
of the EPC.

3.The GEB Attorney has proved Charge XIV
by a preponderance of the evidence.

Evasion of Federal Luxury Tax

Charge XVI alleges:

Commission of a Felony Under Federal Law
-- Tax Evasion: In or about 1991 in Rhode Island and elsewhere,
ARTHUR A. COIA committed a felony violation under federal law,
to wit: Coia did knowingly and willfully attempt to evade and
defeat the payment of approximately $42,000 in federal luxury
taxes due and owing by him to the United States of America under
26 U.S.C. ?4001 on the purchase of a 1991 Ferrari automobile bearing
Vehicle Identification Number ZFFMN34A6M0089653 for $450,000,
all in violation of Title 26, United States Code ?7201.

Discussion

In Charge XVI, the GEB Attorney alleges that
Coia willfully evaded the payment of $42,000 in federal luxury
tax on the purchase of the Ferrari F40 in violation of 26 U.S.C.
?4001.(28)

This was an amended charge, added months
after the original charges were filed.

The LIUNA EDP permits the GEB Attorney, in
his discretion, to bring a disciplinary charge against a LIUNA
member based upon any felony conviction of the member in state
or federal court. The EDP also permits the GEB Attorney to bring
a disciplinary charge based upon evidence that would indicate
an individual has committed a federal or state felony, even though
that individual has not been charged by the state or federal authorities.
See EDP, Section 3, The GEB Attorney.

In the instance where no federal or state
charges have brought against the member, the IHO has the authority
to determine whether the member has committed a felony where the
application of the criminal statute is clear and there are no
peculiar executive branch policies which must be considered before
charges are brought. The IHO has found that individuals have committed
state and federal criminal violations, although the violations
were not charged by the proper authorities. See In the Matter
of Amarel, IHO Order and Memorandum, 96-45D (December 9, 1996)(assault
in violation of Canadian law); In the Matter of Beck, IHO
Order and Memorandum, 98-15D (August 10, 1998)(embezzlement in
violation of 29 U.S.C. ?501(c)); But see In the Matter of Proto,
IHO Order and Memorandum, 97-09D (March 26, 1998)(IHO refused
to find violation of New Jersey racketeering statute).

In the case of a violation of a federal tax
statute, whether an individual owes the federal tax, and whether
the person will be charged with a criminal violation of that tax
statute, is a decision within the initial discretion of the Internal
Revenue Service ("IRS"). Only the Commissioner of the
IRS and his delegate can decide whether a tax is due and whether
the failure to pay a tax constitutes a criminal offense. 26 U.S.C.
??7401, 9801. The decision is not simply a factual determination.
For example, a failure to file a personal income tax return may
not result in a criminal charge, even for failing to file returns
for several years.

The IRS has guidelines to determine whether
it will consider if a civil tax is due and owing and whether the
IRS will recommend criminal charges if there was a failure to
pay the tax. For example, the Criminal Investigation Standards
and Policies section of the IRS Practices and Procedures states
that in tax evasion cases, prosecution is recommended only if
(1) the average yearly additional tax for criminal purposes is
$2,500 or more, and (2) an uncomplicated fact pattern is involved.
See IRS Practices and Procedures, Criminal Investigation Standards
and Policies ? 12.03[3][a](Michael Saltzman ed., 2d ed. 1991)(emphasis
added).

Moreover, the DOJ cannot bring criminal tax
charges unless the IRS first makes a recommendation. The IRS has
primary jurisdiction in this area, and it is strictly an executive
function. See Pseudonym Tax Payer v. Miller, 497 F. Supp.
78, 81 (D. N.J. 1980). Even after a recommendation is made by
the IRS, the DOJ Tax Division may decline prosecution. 28 U.S.C.
?547(a). The DOJ Tax Division also applies its own unwritten informal
guidelines.

In summary, the decision whether circumstances
indicate that tax is owing and whether the act constitutes a criminal
tax violation is not for the IHO to make. The IHO has no knowledge
of the IRS guidelines or the current policy of the IRS on criminal
prosecutions, especially in cases involving complicated statutes
and fact patterns such as those involved here. The matter is further
complicated by the fact that the luxury tax is a one time tax
and has been paid by the person who purchased the F40 from Viking.

The IHO is unpersuaded by the testimony of
GEB Attorney witness Robert Russo ("Russo"). He was
never a member of the IRS Regional Counsel staff, which make such
decisions, but was a special agent field investigator. See
United States v. LaSalle Nat'l Bank, 437 U.S. 298, 315 (1980)("while
the special agent is an important actor in the process of referring
a matter for criminal prosecution his motivation is hardly dispositive").
The Regional Counsel of the IRS has broad discretion in determining
whether to assess a tax deficiency or prosecute a tax violation
criminally. A labor arbitrator cannot pretend to assume the application
of such discretion, especially in the very complicated fact pattern
presented in this case. Moreover, there is no precedent in this
area. The IHO's independent research has disclosed no reported
criminal cases for failure to pay luxury tax and the GEB Attorney's
witness, Russo, testified he know of none. Tr. 2801. Moreover,
the IHO notes that the luxury tax was paid by the person who purchased
the car from Coia.

If Coia was required to pay luxury tax on
the F40 and his failure to do so was a result of fraud, as the
GEB Attorney contends, there is no statute of limitations on civil
tax fraud. Tr. 2801-02. The report of the GEB Attorney in this
matter can easily be referred to the IRS, an organization always
eager to collect taxes. The IHO would be surprised if such referral
has not already been made.

Charge XVI is dismissed as not being within
the province of a labor arbitration.

The GEB Attorney has not proved Charges I
and III through XIII by a preponderance of the evidence.

The IHO has considered Charges XIV, XV, and
XVI as a group. Based upon this grouping, the IHO finds that Charge
XV has not been proved by a preponderance of the evidence, but
the evidence submitted in support of Charge XV has been considered
in support of Charge XIV. Based upon the evaluation of the evidence
of both Charges XIV and XV, the IHO finds:

The GEB Attorney has proved Charge XIV by
a preponderance of the evidence.

The GEB Attorney has not proved Charge XV
by a preponderance of evidence.

Charge XVI is dismissed as beyond the province
of a labor arbitration.

Although Coia actually lost money on the
venture with Carcieri, he was offered the unique opportunity to make a large profit
and received favorable terms on the purchase of the vehicle. The
conflict of interest in this matter occurred at the highest level
of the Union, between the Chief Financial Officer and a major
vendor to LIUNA.

The reform process is about more than organized
crime; it is about financial integrity in the labor movement.
The adoption of EPC was meant to bring an awareness of financial
integrity to all LIUNA officers, from the Business Manager of
a small local union with 200 members to the General Executive
Board members in Washington, D.C.

If the EPC is to have any relevance to LIUNA
officers at the local and International Union level in the future,
there should be a penalty commensurate with the benefits improperly
obtained to demonstrate that such conduct will not be tolerated
in LIUNA at any level. The penalty must be one that is remedial
and a deterrent.

Coia is assessed a fine of $100,000. The
fine may be paid over a two year period.

This Order takes effect in ten days unless
a notice of appeal is filed with the Appellate Officer within
ten days.

1. The language set forth here differs from
the language set forth in Appendix B of the EDP. These differences,
however, have no bearing on the present case.

2. On September 25, 1998, in a footnote in
his post-hearing brief, the GEB Attorney withdrew Charge II against
Coia. GEB Attorney Post-hearing Brief ("GEB Br.") at
52 n.22.

3. Citations to the record for this chronology
will be supplied infra in the Findings of Fact.

4. The history and structure of the LCN were
discussed at length in Fallacara, IHO 96-65D at 2-4; Chicago District
Council, IHO 97-30T at 6; and, In the Matter of Franco, IHO Order
and Memorandum, 98-04D at 10-12 (October 6, 1998).

A "made member" is an individual
who has been accepted and inducted into an LCN family. Induction
into the LCN is referred to as "getting made." To be
inducted, a member must undergo a formal initiation ceremony,
followed by all of the LCN families, in which the proposed member
swears his allegiance to the family. See Fallacara, IHO 96-65D
at 4.

An associate of the LCN is a person who is
not a made member of an LCN family but who participates in, cooperates
with, or facilitates the LCN's activities. Associates are of two
types: (1) criminals who are taken into the fold by the members
or (2) persons who work at legitimate businesses, but perform
tasks, provide services, or assist members in their illegal activities.
Id. at 3.

5. Hillary could not remember which incident
took place first, the one at Kendall Estates or the one at the
Union House. Tr. 701.

6. This case is frequently referred to throughout
the record as the "Hauser case," since Joseph Hauser
("Hauser") was the government's key witness.

7. These were during the period when the
joint defense meetings occurred, the propriety of which has already
been conceded by the GEB Attorney. See GEB Br. at 58.

9. Gifts such as these must now be approved
by the IG but, at the time, were purely a matter of discretion
on the part of the local union Executive Board.

10. Robert Connerton of the law firm of Connerton,
Ray & Simon ("the Connerton firm") was retained
by LIUNA as attorney Robert Connerton was the General Counsel.

11. In his deposition taken by the GEB Attorney
on February 9, 1995, Daniel Caivano stated that his main objective
as the Local 66 trustee was to immediately remove Vario as the
Funds Administrator. R. Ex. 103 at 92. See also R. Ex. 56. Vario
submitted his letter of resignation upon confrontation by Daniel
Caivano. R. Ex. 103 at 73.

12. Curiously, although Fino had been a government
informant for at least 15 years inside Local 210, he had never
been called upon to testify about his activities in running that
Local before testifying before the IHO in the Bifulco case in
August of 1996.

13. During his investigation into Fino's
allegations, Elbaor periodically copied Coia on his memoranda
to Connerton or sent memoranda directly to Coia keeping him apprised
of the investigation. See R. Ex. 127, 138, 140.

14. The GEB Attorney avers that Giardina's
father is a made member of the LCN. GEB Ex. 94.

15. Solano was the President and Business
Manager of Local 1 in Chicago and a delegate to the Chicago District
Council from 1970 until his death in 1992. Chicago District Council,
IHO 97-30T at 61 ?141.

16. Coia first appeared as a witness against
Serpico at a hearing before the IHO on May 19, 1995 after Coia
suspended him from office pursuant to his new powers under the
EDP. Tr. 5371-72. There, Coia testified to his Chicago meeting
with Solano and the struggle for the presidency with Serpico which
is related infra at pp. 65-67.

17. Booker has since been elected the International
General Secretary-Treasurer.

18. Matassa was the Vice President of the
Chicago District Council and the President and Business Manager
of Local 2 in Chicago. See generally Chicago District Council,
IHO 97-30T at 66 ??172-192.

An officer or member in good-standing may
prefer charges against any other officer or member of a Local
Union, by filing written charges in duplicate with the Recording
Secretary of the Local Union. These charges must be signed by
the person preferring the charges and indicate the provisions
of the Constitution to be relied upon, or the agreement or rule
alleged to have been violated, and must set forth the specific
violation or wrong charged and the date on which it allegedly
occurred.

Article XII, Section 3 of the Uniform Local
Union Constitution states in relevant part:

The members of the Executive Board of the
Local Union shall constitute the Trial Board; except that neither
the charging party nor the accused nor any member directly interested
or involved in the charges may sit as a member of the Trial Board.

20. The lack of precedent is evidenced by
the fact that, prior to the Consent Decree with the IBT, none
of the union trustees who were installed by the suits filed pursuant
to the RICO Act filed disciplinary charges against officers for
associating with organized crime. See United States v. IBT (Local
560), 581 F. Supp. 279 (D.N.J. 1984); Roofers (Local 30), 686
F. Supp. 1139 (E.D. Pa. 1988); ILA, 812 F. Supp. 1303 (S.D.N.Y.
1993).

21. The Chicago District Council was placed
under trusteeship in 1998 for being under the influence of Organized
Crime. See Chicago District Council, IHO 97-30T.

22. Charge XV is being dealt with prior to
Charges XIV and XVI due to the direct correlation between them
and the history which is set forth relating to them in Charge
XV.

23. Citations to the record for the items
listed in this chronology will be supplied infra in the Findings
of Fact.

24. During this same time, Coia, Sr. was
LIUNA's General Secretary-Treasurer but Respondent Coia did not
yet have a position with the International Union.

25. Coia and Carcieri have known one another
for many years and remain friends to this day. Tr. 4412-13; GEB
Ex. 200, Tab C at 193-94.

26. Coia did not attend this meeting but
made an appearance to show his support for Viking. Tr. 2511.

27. The GEB Attorney also alleges that Coia
and Carcieri did not pay $33,750 in Rhode Island state tax on
the F40, but failed to provide any evidence to support this allegation
including the tax statue involved. The IHO, therefore, will not
reach the merits of this allegation. The allegation appears to
suffer the same effect as the charge of failure to pay the luxury
tax as alleged in Charge XVI.

(a) Imposition of tax. -- (1) In general.
There is hereby imposed on the 1st retail sale of any passenger
vehicle a tax equal to 10 percent of the price for which so sold
to the extent such price exceeds the applicable amount. (2) Applicable
amount. (A) In general. Except as provided in subparagraphs (B)
and (C), the applicable amount in $30,000.

26 U.S.C. ?7201 states:

Attempt to evade or defeat tax. Any person
who willfully attempts in any manner to evade or defeat any tax
imposed by this title or the payment thereof shall, in addition
to other penalties provided by law, be guilty of a felony and,
upon conviction thereof, shall be fined not more that $100,000
($500,000 in the case of a corporation), or imprisoned not more
than 5 years, or both, together with the costs of prosecution.